This has all the earmarks of another sounds-cool-at-first Google project that won't amount to much in the end.
Modularity sounds like a good idea, but in practice, in cellphones, I don't think it'll work. In objects of that size every millimeter counts, and modularity takes up quite a bit of space at that scale, because each part needs to be enclosed, securely attach to the others, etc. The trade-offs will mean you'll be able to pick one or two things (e.g. speed, battery life, extra features, etc.) but not all at the same time. And the prices won't be good, because manufacturer(s) will not have economies of scale: it'll be hard to compete with Apple and Samsung making millions and tens of millions of identical units.