People

Apple wants to help me and my fat fingers

The funnest (and funniest) patent applications of the week!

iPhone

Sorry, Steve Jobs, my fingers aren't built for this.

Image: Protocol

Happy Fourth of July to all who celebrate. I'm celebrating by eating some hot dogs, going swimming and rounding up some of the funnest (and funniest) patent applications of the week.

Google wants to help make credit card fraud a bit easier to spot, Amazon is worried about people spilling drinks on the Echo, Apple wants to help me not make so many typos, Facebook is looking out for my Beat Saber sessions and Microsoft wants to make parental controls a little more intuitive.

And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.

Alphabet

Easier financial transactions

Fraudulent transactions on a credit card are a pain. It often takes the credit card provider time to gather all the information and verify that the chargers were in fact fraudulent. That's because all of that info — balances, charges, location of charges — is kept in various places, and finding the information takes a lot of resources. This patent imagines a platform where all of the information is stored in one place: an electronic ledger that acts as a single source of truth. It could be used to make transactions at merchants, send money to friends and even sign up for new accounts. That way, the next time something is amiss, the institution doesn't have to look at various forms of data to get your financial situation back on track.

Amazon

Prettier (and more durable) portable speakers

I have so many smart devices in my home, I can get anything done from the couch. But having that many gadgets can be an eyesore (I mean, I don't think it's ever an eyesore, but someone else could, I imagine). This patent takes into account the aesthetics and durability of a smart assistant. Lights and buttons and microphones and cords aren't just unsightly, but they can get messed up and ruin the whole machine if a drink is spilled nearby. It describes ways in which to build the assistants to ensure that they're sturdy, last a long time and in some cases, even keep costs down.

Apple

Phone interface for fat fingers like mine

Steve Jobs hated big phones. In the iPhone 4 era (remember antennagate?), he wasn't shy about tearing big phones apart, calling some "Hummers," saying that "You can't get your hand around it," in reference to larger form factors, and even predicting that "No one's going to buy that" big phone. (For the record, he was wrong; larger phones have been the standard for many years. A year after his death, even Apple released the taller iPhone 5 and the iPhone 6 and 6 Plus a year later.)

But even on a bigger display, my fat fingers still can't type words correctly on the first try, and I certainly have a hard time scrolling through documents and emails. This patent imagines an interface that adapts to what's happening on the screen. For example, if there are a ton of apps on the screen, a menu button would come in handy to help find what you're looking for. Or the app icons could shrink to fit more on the screen and negate the need for scrolling.

Facebook

Muffling VR headset sounds

The silliest part about a VR headset is that unless you have headphones in, everyone in the room can hear what song you're playing Beat Saber to. Or they can hear a conversation you might be having. This patent wants to help mitigate sound leaking from the headset without the use of headphones. It imagines various privacy levels that the user can set that then lay an audio filter over the sound. That way, I can do the BTS Beat Saber 15 times in a row and nobody would even notice.

A yarn strap

There's really not much to say about this one, other than part of the patent application just describes what a yarn strap might be used for … such as tying two things together. But basically it's describing a method and apparatus in which to finish the ends of the strap, so that they don't fray. Whew, I was really worried about frayed straps, but I'm glad someone is looking into it.

Microsoft

Parental controls for the future

Parental controls are pretty simple: I set a time limit for the device itself or certain apps, or block certain apps from being accessed at all. But as devices change, and kids' habits change, some parental controls might feel too rigid or constrained, or might not work at all.

This patent describes a way to set parental controls that use context clues as well as hard and fast rules. For example, in the future, I might allow my kid to use Instagram (not now, he's almost 3), but not while he's driving a car. Or the system might keep track of homework hours and then automatically allocate bonus YouTube time based on settings.

Good job, Jill. Bonus YouTube time for you.Image: UPTO

Image: Yuanxin

Yuanxin Technology doesn't hide its ambition. In the first line of its prospectus, the company says its mission is to be the "first choice for patients' healthcare and medication needs in China." But the road to winning the crowded China health tech race is a long one for this Tencent- and Sequoia-backed startup, even with a recent valuation of $4 billion, according to Chinese publication Lieyunwang. Here's everything you need to know about Yuanxin Technology's forthcoming IPO on the Hong Kong Stock Exchange.

What does Yuanxin do?

There are many ways startups can crack open the health care market in China, and Yuanxin has focused on one: prescription drugs. According to its prospectus, sales of prescription drugs outside hospitals account for only 23% of the total healthcare market in China, whereas that number is 70.2% in the United States.

Yuanxin started with physical stores. Since 2015, it has opened 217 pharmacies immediately outside Chinese hospitals. "A pharmacy has to be on the main road where a patient exits the hospital. It needs to be highly accessible," Yuanxin founder He Tao told Chinese media in August. Then, patients are encouraged to refill their prescriptions on Yuanxin's online platforms and to follow up with telehealth services instead of returning to a hospital.

From there, Yuanxin has built a large product portfolio that offers online doctor visits, pharmacies and private insurance plans. It also works with enterprise clients, designing office automation and prescription management systems for hospitals and selling digital ads for big pharma.

Yuanxin's Financials

Yuanxin's annual revenues have been steadily growing from $127 million in 2018 to $365 million in 2019 and $561 million in 2020. In each of those three years, over 97% of revenue came from "out-of-hospital comprehensive patient services," which include the company's physical pharmacies and telehealth services. More specifically, approximately 83% of its retail sales derived from prescription drugs.

But the company hasn't made a profit. Yuanxin's annual losses grew from $17 million in 2018 to $26 million in 2019 and $48 million in 2020. The losses are moderate considering the ever-growing revenues, but cast doubt on whether the company can become profitable any time soon. Apart from the cost of drug supplies, the biggest spend is marketing and sales.

What's next for Yuanxin

There are still abundant opportunities in the prescription drug market. In 2020, China's National Medical Products Administration started to explore lifting the ban on selling prescription drugs online. Although it's unclear when the change will take place, it looks like more purely-online platforms will be able to write prescriptions in the future. With its established market presence, Yuanxin is likely one of the players that can benefit greatly from such a policy change.

The enterprise and health insurance businesses of Yuanxin are still fairly small (accounting for less than 3% of annual revenue), but this is where the company sees an opportunity for future growth. Yuanxin is particularly hoping to power its growth with data and artificial intelligence. It boasts a database of 14 million prescriptions accumulated over years, and the company says the data can be used in many ways: designing private insurance plans, training doctors and offering chronic disease management services. The company says it currently employs 509 people on its R&D team, including 437 software engineers and 22 data engineers and scientists.

What Could Go Wrong?

The COVID-19 pandemic has helped sell the story of digital health care, but Yuanxin isn't the only company benefiting from this opportunity. 2020 has seen a slew of Chinese health tech companies rise. They either completed their IPO process before Yuanxin (like JD, Alibaba and Ping An's healthcare subsidiaries) or are close to it (WeDoctor and DXY). In this crowded sector, Yuanxin faces competition from both companies with Big Tech parent companies behind them and startups that have their own specialized advantages.

Like each of its competitors, Yuanxin needs to be careful with how it processes patient data — some of the most sensitive personal data online. Recent Chinese legislation around personal data has made it clear that it will be increasingly difficult to monetize user data. In the prospectus, Yuanxin elaborately explained how it anonymizes data and prevents data from being leaked or hacked, but it also admitted that it cannot foresee what future policies will be introduced.

Who Gets Rich

  • Yuanxin's founder and CEO He Tao and SVP He Weizhuang own 29.82% of the company's shares through a jointly controlled company. (It's unclear whether He Tao and He Weizhuang are related.)
  • Tencent owns 19.55% of the shares.
  • Sequoia owns 16.21% of the shares.
  • Other major investors include Qiming, Starquest Capital and Kunling, which respectively own 7.12%, 6.51% and 5.32% of the shares.

What People Are Saying

  • "The demands of patients, hospitals, insurance companies, pharmacies and pharmaceutical companies are all different. How to meet each individual demand and find a core profit model is the key to Yuanxin Technology's future growth." — Xu Yuchen, insurance industry analyst and member of China Association of Actuaries, in Chinese publication Lanjinger.
  • "The window of opportunity caused by the pandemic, as well as the high valuations of those companies that have gone public, brings hope to other medical services companies…[But] the window of opportunity is closing and the potential of Internet healthcare is yet to be explored with new ideas. Therefore, traditional, asset-heavy healthcare companies need to take this opportunity and go public as soon as possible." —Wang Hang, founder and CEO of online healthcare platform Haodf, in state media China.com.

Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.

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