Before we get into the whole smart assistant part of it, let's start with a few basic features. They include something called Expressions, which are essentially amped-up versions of emojis and stickers. For example, Kay demonstrated a gesture called Whisper Shout, wherein sliding your finger down will result in a small-text "whisper" while sliding it up will prompt a large-text "shout." You can also send full-bleed photos plus doodle over them like you can on Snapchat. Interestingly, you sign up for Allo using your phone number, not your Google account. In fact, connecting Allo to your Google account is completely optional.
Another feature is something called Smart Reply, which utilizes some of that machine learning mentioned earlier. So if someone says "Dinner later?" it'll automatically suggest options like "I'm in!" or "I'm busy" as it anticipates what you want to say next. The more you use it, Kay says, the better at responding the app will be. Smart Replies can also include emojis and stickers, by the way.
Smart Replies even works in response to photos. Allo builds upon Google's computer vision capabilities to understand the context and content of images. It'll understand that your friend just sent a photo of a dog, for example, and even the breed of it. So an automated Smart Reply would be something like "Cute dog!" If it's a photo of clam linguine, it'd suggest "Yummy" or "I love clams!"
Now onto the smart chatbot part of it, which is where Google Assistant comes in. It functions similarly to the sort of chatbots proposed by Microsoft and Facebook, except it appears to be more automated. So, if someone says they want Italian food for dinner, a Smart Reply will automatically show up suggesting a dinner reservation. Tap that and you'll see a restaurant reservation card that'll show a list of restaurants nearby. Each restaurant listing has links to info like opening hours and a maps location. Then if you like, you can select "make a reservation" and it's able to do so via OpenTable.
You may also call up Google Assistant just by typing "@google" in the chat window. Doing so will let you chat with the robot much in the same way you would talk to a search engine. You can search for funny GIFs so you can share them with your friends, for example.
You can also just chat with the Google Assistant directly if you want deeper information. Google gave a demo on the I/O stage where someone looked up a recent soccer match, instantly recognizing that the person using it was a Real Madrid fan. From there he was able to call up the team's roster as well as profiles of each player.
If you like, you can also play games with the Google Assistant. Google demonstrated "Emoji Games" on stage, which is a game where you're supposed to guess a movie title based on a string of emojis. There'll apparently be more such Allo games in the future, though the selection depends on what developers will come up with.
As for security features, Allo has an Incognito mode similar to what you'll already find in the Chrome browser; opt for that if you want your messages to be private and secure. It features end-to-end encryption, private notifications and expiring chats. If you delete an incognito conversation on Allo, it's gone forever.
Allo will be available for both Android and iOS later this summer.
For all the latest news and updates from Google I/O 2016, follow along here.