Project Ara is a Google initiative to create an open hardware platform for modular smartphones, allowing users to customize and upgrade components like displays, batteries, and keyboards. Led by Paul Eremenko, the project utilizes an endoskeleton design for module attachment and communication through technologies like Unipro and capacitive M-PHY. The first model is expected to launch in January 2015, with an estimated price of around $50, aiming to revolutionize smartphone customization and longevity.