Project Ara has been delayed.

Earlier this year, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) announced that it would launch Project Ara -- its plan to deliver a fully modular smartphone -- in the second half of 2015. The search giant had selected Puerto Rico to serve as its test bed, allowing it to tweak the program before its eventual global roll out. But the plan has changed. Google has delayed Project Ara's launch to sometime next year and has bailed on Puerto Rico altogether.

Project Ara is a truly radical initiative. If it succeeds, it could quite literally remake the smartphone market entirely, and weigh on major vendors, including both Apple (NASDAQ:AAPL) and Samsung (NASDAQOTH: SSNLF). But with every delay, it runs the risk of becoming vaporware.

Modularity comes to mobile?
Desktop PCs and, to a lesser extent, laptops, have always been modular. Hard drives can be replaced. Graphics cards can be upgraded. Motherboards and power supplies can be swapped out (most of the time).

But that's never been the case for smartphones. If you're technically inclined, you might be able to repair a cracked screen or swap a sealed-in battery, but you certainly can't upgrade your phone's display, replace the camera module with the something better, or upgrade the processor to the latest model. Consumers who want a better smartphone have but one choice: Buy a new one.

With Project Ara, Google could change that. Project Ara smartphones are fully modular, built out of a collection of small rectangles (modules) held together by a magnetized chassis. If you decide your phone's display doesn't have enough pixels, you can buy a new one. If you want a bigger battery, you can buy a different one. If you want to add a new sensor, just buy a corresponding module, and swap the processor out for something better if your phone is getting too sluggish.

A major risk factor
For consumers, the upside seems obvious. Perhaps they want more battery, but don't care much about the camera. Or they want a fingerprint scanner, but a lower resolution display. Project Ara smartphones would allow them to build a device to suit their particular specifications, and they wouldn't have to get rid of it every other year.

It also opens up entirely new possibilities for the smartphone. At the Mobile World Congress earlier this year, a company called Yezz announced a few prototype modules for Project Ara, including an e-ink display, integrated game controller, and solar charging panel.

For smartphone manufacturers, the situation could be quite different. Companies that depend on selling integrated devices would face a completely new sort of competition -- one that could literally upend their business models. Consumers could continue to purchase Samsung's integrated Galaxy smartphones, or buy a Project Ara device instead.

Project Ara smartphones are powered by Google's Android operating system, just like the competition Apple's iPhone faces today. Android has long been the more customizable platform, allowing for greater flexibility than Apple's iPhone. That's obviously attracted some consumers, but Apple has been able to establish and retain a large base of customers. Offering true modularity, however, could make the Android ecosystem far more compelling.

At least in theory.

Google has demonstrated a working Project Ara smartphone -- in May, at its I/O conference earlier this year -- but a prototype is quite different from a finished product. With the delay, there is no longer any firm release date for Project Ara. Google doesn't even have a set location -- it's said only that it's looking at a few different spots in the United States.

Project Ara is a major risk factor worth keeping in mind, and it's one of the search giant's most exciting moonshot bets. But until Google demonstrates something concrete, it's probably not worth worrying about.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.