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What Do Smart Home Devices Do With Your Data?

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What Do Smart Home Devices Do With Your Data?

Smart home devices like the Amazon Alexa range, the Apple Homepod and Google Home are currently the ‘must-have’ home devices. Data from 2018 shows there are 50 million smart speakers in the US alone, with Amazon holding 70 per cent market share. If you don’t have one already, here’s a quick overview of how they work: you control a smart speaker by talking to it. You can use it to play music, find out the latest news, play games and much more. People love these devices because they’re easy to use, great fun and bring a touch of sci-fi ‘magic’ into the home. 

However, many consumers are concerned that smart speakers are the next highly intrusive step in the surveillance society – that tech giants are listening to us 24/7, recording and storing everything they hear. Are these worries legitimate?


What information do smart home devices collect?

While each brand of smart speaker works in a slightly different way, the main principles are the same. Your smart speaker doesn’t constantly record everything going on in your home. What your speaker does is ‘listen’ for your ‘wake word’, such as ‘Alexa’ or ‘OK Google.’ When it hears those words, it wakes and starts recording your question or command.

It sends your recording to a server in the cloud. The software analyses your voice and then does what you have asked it to do, such as answer a question or play a song. 

After that, the recordings of your voice are sent to an Amazon or Google data warehouse where they are stored. (Apple does not store your recordings.) You can manually delete these recordings, but it’s quite a laborious process. 

The question now is, what do Amazon and Google do with these clips of your voice? 



If you’re worried that Amazon and Google are selling your voice data to the highest bidder, there is good news. These tech giants do not sell your data on – they don’t need to. They can do more by keeping it for themselves. 

They use your data to help understand you better. The questions you ask your smart speaker show what you are interested in. If you’re interested in a particular topic, you are likely to buy things that are related to it. Next time you’re on amazon.com, you might see an ad that nudges you in the direction of the item you asked about. Next time you watch a video on YouTube (owned by Google), the ad that plays before your video could be related to your Google Home voice search. 


Improving the service

The other reason Amazon and Google store your voice data is to improve the service they provide. Currently, Alexa and Google Home work well, but there are flaws. You need to speak slowly and clearly to it, and even then it doesn’t always understand what you say. 

Amazon and Google are storing multiple terabytes of data which can be analysed using AI and machine learning. The more data they collect, the more they can analyse. All of this helps Alexa and Google Home perform better with different languages, dialects, even regional accents. This analysis helps identify words when asked in noisy places, like an airport or train station. 

This data can also be used to work out what the most popular questions are, then provide answers which totally satisfy the user. All in all, your voice searches help build a better product for everyone.


What’s next?

Right now, Amazon and Google use our voice data for relatively harmless purposes, which you could say benefit us as much as it benefits them. Overall, consumers are not opposed to a nudge towards products they are interested in. Plus, we all want our smart devices to work better. Do we begrudge them using our voice data in this way?

In the future, however, this could change. Amazon says it does not want to introduce advertising on to the Alexa platform, but if the price is right, could that change? If Alexa knew you were asking about flights to Paris, the ability to play a 30-second ad for British Airways could be rather valuable.

The voice assistant sector is anticipated to achieve revenues worth USD 7.8 billion by 2023. These tech giants must continue to keep a close eye on the security of the voice data they collect if they are to avoid a consumer backlash over misuse of data. Currently, all the audio whizzing back and forth from the cloud is encrypted and anonymised. Until now, there have been no significant security breaches. 

The convenience of being able to get what you want from tech, using only your voice, has the potential to change the way we communicate. Our voice data is the fuel that powers it.


About Hampleton Partners

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt and San Francisco, Hampleton offers a global perspective with sector expertise in: Automotive Technology, IoT, AI, Fintech, Hi-Tech Industrials & Industry 4.0, Cybersecurity, VR/AR, Healthtech, Digital Marketing, Enterprise Software, SaaS & Cloud and eCommerce.

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Managing Partner

Jo Goodson

Jo Goodson is Managing Partner of Hampleton's London office.

She is an accomplished tech entrepreneur with over 25 years' experience in the industry. Jo began her career in the industry during the mid-90s when she joined Broderbund as their second European employee and grew revenues from $0 to $24m in three years. She went on to co-found MediaGold, which, with further offices and bases in France, Italy, Spain and Germany, created an entity providing US software publishers access to the European market place.

After four years of solid growth and profitability, she sold the business in 2003 to Avanquest—a Paris-based Euronext-listed company—where she served as their managing director responsible for the UK and the Nordic region. After leaving she was heavily involved in their acquisition efforts in northern Europe.

Since then, Jo has advised and invested in a range of software and internet companies such as Ariadne Capital, an investment and advisory firm where Jo also acted as interim COO; Indigo Pearl, a games industry PR company; Mediatonic; and Playmob. She is also a non-executive director of Six to Start, who recently released the highly successful iPhone app, "Zombies, Run!".