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Google's secret home security superpower: Your smart speaker with its always-on mics

Google speakers are listening to more than just voice commands. Using them for home security could supercharge Google's $450 million ADT deal.

The Google Home speaker on a table

Google announced support for the detection of "critical sounds" for paying subscribers of its Nest Aware home security subscription service in May.

Photo: Thomas Kolnowski/Unsplash

Last week, Reddit user Brazedowl received a curious notification on his phone: Google was telling him that a smoke detector in his home had gone off. Brazedowl, a teacher from North Carolina who goes by Drew in real life, knew about the smoke alarm — he was at home himself and had just fried some sausages in his kitchen. But up until that moment, he had no idea that his smart speaker was able to detect such events. "Google just made my dumb smoke detectors smart," he wrote on Reddit. "Pretty rad."

A Google spokesperson told Protocol that the feature was accidentally enabled for some users through a recent software update and has since been rolled back. But in light of Monday's news that Google invested $450 million — acquiring a 6.6% stake — in home security provider ADT, it may be a sign of things to come for Google, as it hints at the company's secret home security superpower: millions of smart speakers already in people's homes.

Once the deal closes, ADT's more than 20,000 installers will also sell Google-made smart displays, security cameras and other hardware, and ADT will more closely integrate Google technology into its own home security offerings. "The goal is to give customers fewer false alarms, more ways to receive alarm events, and better detection of potential incidents inside and around the home," Google Nest VP and GM Rishi Chandra said in a blog post.

Brazedowl wasn't the only Google smart speaker user receiving a possible preview of this kind of incident detection in recent days. Other Reddit users reported getting security alerts after breaking glassware, as well as some false alarms triggered by sounds like popped bubble wrap and high-frequency noises that could be confused with a smoke alarm.

When Reddit user Brazedowl fried some sausages last week, accidentally setting off a smoke alarm, his Google Home smart speaker sent alerts to his phone.Screenshot: Reddit

Google announced support for the detection of "critical sounds" for paying subscribers of its Nest Aware home security subscription service in May. "Your Nest speakers and displays will notify you if a critical sound is detected, like a smoke alarm or glass breaking, by sending an alert to the Home app," the company wrote in a blog post. "From there, you can hear an audio clip or listen live within the Home app to confirm the alarm."

"A recent software update enabled these alerts on some of our speakers that didn't have a subscription, but we've since rolled that back," a Google spokesperson told Protocol last week. The spokesperson declined to comment on whether Google had any plans to bring the feature to users without subscriptions in the future. Google did announce Monday that ADT customers would get access to Nest Aware over time.

On the one hand, there is some potential for a privacy backlash. Google has long told users that its speakers only actively monitor ambient audio for utterances of the "Hey Google" wake phrase. Any use of far-field microphones for other purposes, especially for users who didn't sign up for advanced monitoring, could result in some consumers rejecting the device category altogether.

On the other hand, the feature does demonstrate how powerful Google's smart speakers can be in the context of home security. Google sold around 30 million smart speakers and displays in 2019 alone, market research company Strategy Analytics estimated earlier this year. All of these devices feature powerful far-field microphones capable of detecting not only voice commands but also environmental noises.

Some of this functionality is less obvious than the detection of blaring smoke alarms. Google's smart displays sense it if someone walks up to them by emitting and monitoring ultrasonic sounds. Right now, this is being used to change the size of fonts on the display, but the same technology could conceivably also be used to detect possible intruders and other movements inside a home.

Google isn't the first company to rely on smart speakers for monitoring; rival Amazon also uses smart speakers to detect fire alarms and other sounds as part of its Ring Alarm security system.

But in a way, it is a very Google-ish approach to home security: The search giant has long made its own cameras and smoke detectors, with mixed success, and largely failed to make a mark when it introduced its very own home security system in 2017.

With its ADT partnership, Google now signals that it is happy to rely on others for the more mundane aspects of home security, including the huge workforce needed to install and troubleshoot window sensors and the like. Instead, Google is bringing to the table what it does best: advanced technology, including millions of cheap speakers with far-field microphones, ready and able to become smart home security sensors.

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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