Smartphones to open doors for world's biggest locksmith as it eyes deal with telcos
Assa Abloy, the world's largest lock maker, is negotiating partnerships with mobile-phone companies as new software for Apple and Google devices will allow users to open doors with their smartphones.
"This industry is rapidly becoming electronic, but you still need a lock," chief executive Johan Molin said in an interview in the Stockholm headquarters of the company with a market value of $19bn. The 133-year-old lockmaker is in talks about deals with technology companies that are looking for partners in a business set for exponential growth, said Mr Molin while declining to give names.
While Apple, Google and South Korea's Samsung invest in applications to operate household objects via mobile devices, the global market for smartphone-controlled residential locks is predicted to surge to $3.6bn in the next five years, from $261m in 2013. Users will be able to send temporary digital keys to friends and family members, lock doors remotely or use a phone to open their garage door while sitting in the car.
As Assa Abloy faces new digital lock rivals such as US- based August and Lockitron, the Swedish company is trying to get ahead of the pack and attract partners with its expertise to deliver systems that are compatible with varying local standards for safety and fire protection.
Still, it has been more difficult than expected to develop a mobile key system that would work with any smartphone, said Mr Molin (55) who has led Assa Abloy since December 2005.
"We faced resistance from phone makers and from operators who didn't want us to access the phones," he said, declining to give names. "Everyone is fighting over who should get paid for this service. We think that we should get paid."
In June, Apple unveiled HomeKit, a set of tools for developers to make iPhones control things like a light bulb, or lock a door. Samsung last month agreed to buy SmartThings, a startup that makes similar applications. Google, owner of the market-leading Android mobile-phone system, bought Nest, which makes Wi-Fi connected thermostats, for $3.2bn in January.
Assa Abloy, which traces its roots to 1881, will this month start offering mobile keys for businesses. That will allow hotels and companies to replace physical door key cards with codes sent to mobile phones.
The lockmaker, formed in a 1994 merger of Sweden's Assa and Finland's Abloy, is betting the digital push will boost business at a time of subdued overall growth. To meet its goal of 10pc annual revenue growth, the firm is relying on buying companies and starting new products. More than a quarter of its revenue comes from products released in the last three years, Mr Molin said.
Digital door locks represent about 1bn kronor (€109m) of Assa Abloy's revenue, which totalled 48.5bn kronor in 2013.
"We feel certain that this is something that people want," Daniel Berg, head of Mobile Keys at Assa Abloy, said in a separate interview. "At some point, there is an explosion and you get mass volumes. We have made sure to be at the forefront." (Bloomberg)
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