Google’s Paul Eremenko at a LAUNCH event last week performed a first hands-on demo of a Google Ara smartphone that revealed some of the interesting things about Google’s ATAP project. During a 25-minute presentation, Eremenko explained the reason Google is investing resources into Project Ara while showing off two prototypes. Unfortunately neither model was functional.

As previous reports suggested, the Ara is Google’s way of replacing feature phones and cheap smartphones that could be aesthetically pleasing, but also functionally superior to similarly priced alternatives. However, Google doesn’t necessarily want to drive down the price of high-end smartphones with the help of Ara. Instead, Ara phones could help the company connect the other 5 billion people in the world who don’t have Internet access, a goal Google and Motorola execs expressed many times in the past months.

The Google Ara phone will have a $50 entry price – the Grey Phone version – that will give buyers access to the endoskeleton (also known as the “endo” and priced at around $15 when purchased alone), a display, a low-end CPU, a Wi-Fi module, a small built-in battery and Android running the show. The device could then be further upgraded by the buyer, by purchasing additional modules to fit his or her needs, as well as the budget.

The modules will be hot swappable, with the small on-board battery allowing users to also theoretically swap batteries without turning off the device. Furthermore, a module could contain the identity of a user, which would allow him to move from one Ara phone to the next – the Google Ara phones will be available in three sizes, including mini, medium and phablet. The Ara modules will be available in three sizes as well, at least for the back side of the device, with the front side being mostly occupied by the display.

The modules are held in place by pins in the first prototype, helped with electro-permanent magnets, although in future devices capacitive pads will replace pins, and magnets will help the Ara hold the pieces in place. The connection between modules is done via the circuitry in the endo.

In addition to replacing modules, users will also be able to safely remove their independent covers, in order to design and 3D print their own custom covers for each module. In addition to covers, future 3D printing technology may allow hardware makers to also print electrical components for their modules in the future.

Developers will soon get access to the Module Developers Kit (MDK) and Google Ara phones may start selling by next this time next year, or at least that’s what Eremenko hinted at during the show. Google plans to build a Google Play Store-like experience for hardware makers interested in creating their own Ara modules that could be then sold to Ara owners.

The video demoing Project Ara follows below, with Eremenko’s 25-minute presentation taking place in the first half hour of the Day 3 LAUNCH afternoon session.