Israeli startup Modu is looking to give consumers more freedom in what their cell phones can do by offering "jackets" that can make each phone unique.

For example, jackets through partner Universal Music Group would feature the label's various artists, including a "skin" for the phone as well as music functionality to turn the device into a music player.

Another skin could turn the device into a phone aimed at messaging or even into a gaming device. Modu hopes to make these jackets affordable enough that consumers using the phone could change their phones based on their moods or needs.

Devices called Modu Mates take the concept even further: this includes Modu-enabled electronics such as digital picture frames, cameras, and GPS systems. By attaching the phone, these devices would then be able to gain wireless connectivity.

"There are hundreds of handset models on the market: the trouble is that as a consumer you can only have one at a time and you are usually tied to a long and expensive contract," founder and CEO Dov Moran said.

"Modu is challenging that with a solution that offers freedom, boundless possibilities and the opportunity to change your phone without it costing a fortune," he continued.

The company's partners, which also include SanDisk, say Modu could turn into a $1 billion annual business by 2011. Phones will first go on sale in October through three carriers in Russia, Italy and Israel. Modu-enabled electronics are expected to appear in early 2009.

While the cell phone industry is notoriously hard to break into, analysts say that by taking a new approach, Modu could quickly gain traction. So far however, no US carriers for the phone have been announced.

Pricing for the device and jackets have also not been announced, however Modu expects them to be offered at a low cost or for free. Jackets would likely be offered at an additional cost.

Moran is better known as the inventor of the USB flash drive, and has developed several other personal storage solutions now commonplace in the electronics industry.