Global lockmaker Assa Abloy seeks key to future profits in the cloud

Written by Reuters | Stockholm | Updated: Sep 24 2013, 16:08pm hrs
Despite the rapid pace of technology that has overhauled many consumer goods, the front door lock and key is little changed since the 1800s. That is about to change to virtual keys in data clouds, if the world's biggest lockmaker gets its way.

Assa Abloy, which makes one in 10 locks worldwide, is the muscle behind brands such as Yale. But the lock technology it is now developing means consumers will be able to open doors with a tap of their mobile phones, visitors will be able to download a key online and business owners will be able to lock and unlock their premises remotely.

"I think most people will go digital. People will rely more on a secure identity than a physical key, provided over the net into your mobile phone," says Johan Molin, Assa Abloy's lean 54-year-old chief executive.

The new key technology could also unlock higher recurring revenues. While traditional locks last on average four decades, electro-mechanical locks have lifespans of 10-15 years and software coupled with more fickle consumer electronics means these locks will need to be routinely replaced or updated.

It is a model Assa is confident that consumers used to frequently upgrading their phones and tablets will accept.

"People will have the same kind of relationship to their lock that they have to their computer. They will want to have the latest features, designs," Molin said.

Global reach means catering to a rich mix of national nuances that in turn require a combination of products so Assa Abloy is not turning its back on traditional security just yet.

It is also planning acquisitions of hardware manufacturers and traditional locksmiths in China, South America and India, though demand for digital locks is growing fast in the first two of those markets.