Google's Modular Phones Getting Ready To Ship Next Year

"It will be thin, it will be light, it will be beautiful, and we'll launch it next year," said Google's Richard Wooldridge last Friday on stage at Google's I/O developers' conference.

What he’s referring to is a hardware-specialty modular phone from Alphabet Inc. (NASDAQ:GOOGL) that the world will see for the first time. A modular phone is undoubtedly an innovative concept with Google deciding to play with hardware rather than software.

Google’s modular phones will allow you to swap in and out of different hardware components such as camera, speaker and battery, much like Lego blocks. This means that your phone can be customized or upgraded anytime with additional parts that you get separately. The phone will have six interchangeable module slots.

The modular phone, the first one of its kind, is the outcome of Google’s project ARA, an ambitious project aimed at creating a complete hardware platform for smartphone modules. The project was announced two years back but was relegated to the back burner. But the announcement on Friday proves that it is still on.

Developer kits will ship this fall so that third party developers can start building modules. The consumer version will be hitting the markets next year.

Google has not yet revealed the prices of the developer kit and consumer phone.

What’s notable is the timing of the announcement. We believe that Google was waiting for a suitable time to roll out its modular phone.

Smartphone growth is showing signs of a slowdown as market saturation approaches. It appears that for Google, Project ARA that calls for incremental upgrades and greater personalization is the right choice at the right time.

Google currently has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology space include TiVo Inc. (NASDAQ:TIVO) , Netgear Inc. (NASDAQ:NTGR) and Radcom Ltd. (NASDAQ:RDCM) , each sporting a Zacks Rank #1 (Strong Buy).

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