An Israeli company has created the world's smallest mobile phone, which weighs just 40.1g and measures 72mm x 37mm x 7.8mm.

The modular Modu phone system, created by Modu Mobile, can be slotted into different cases or even into other specially developed consumer technology.

The device can be used on its own and has officially been named by Guinness World Records as the world's lightest phone.

"Modu starts with a tiny handset, which is the lightest phone in the world at 40.1g," said Zack Weisfeld, vice president of marketing at Modu Mobile.

Despite its small dimensions, Weisfeld claimed that the phone does " everything that a sophisticated cellphone does".

"You can use it anywhere in the world, send and receive SMS, it has a speaker, Bluetooth, MP3 player with at least 1GB of storage and acts as a mass storage USB Flash drive," he said.

"It is tiny, but it is the right size to make it functional, to make you able to dial numbers."

Slotting the Modu into different "jackets" also allows users to change what the device can do.

"It is truly the smallest and lightest phone in the world, but the idea is that most of the time you will not operate it by itself but within a jacket or within a 'Mate'," said Modu chief executive Dov Moran.

"If you go to the movies and do not want to take the full keyboard with you, or the 5-megapixel camera, if you just want to have the communication device with you, you can carry the Modu device," he said.

Moran added that the company plans to integrate the Modu device into other consumer technologies, thereby adding phone capabilities.

"We began working with three manufacturers of other products about a month a go and the feedback is unbelievable. With very little effort they can make a device with a Modu slot that gives them much broader functionality and features, " he said.

"So we expect devices from a variety of manufacturers from different areas - GPS, camera, picture frame, Dect phone - around the end of 2008 or the start of 2009 and some of our partners are talking about presenting such devices at CES 2009."

Modu phones and jackets would be on sale in October 2008, and the product will launch with mobile phone operators in three markets: Telecom Italia in Italy, Vimpelcom in Russia and Cellcom in Israel.