Global lockmaker seeks key to future profits in the cloud
By Alistair Scrutton
STOCKHOLM (Reuters) - 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 ten 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.
Electro-mechanical locks like key cards in hotels now account for almost half of Assa Abloy's sales compared with 13 percent a decade ago, and the company believes this is just the start of growing demand from consumers for more flexible, high-tech locking mechanisms.
At its Stockholm headquarters, some of Assa Abloy's staff are trialing different versions of virtual keys downloaded to mobile phones that open a lock simply with a swipe of the phone. The company is also working up versions where phones with bluetooth or wireless links could automatically open doors when within a certain distance. Other keys can be set to switch on at a certain date and expire on another date, meaning someone renting a flat, for example, need no longer hand over physical keys at the end of their stay.
The digital keys can be embedded in SIM cards, within software or inside the phone itself, thanks to Near Field Communication (NFC) technology, or short range wireless that within a few years may be standard in most mobile devices. U.S. research firm ABI Research has estimated that the number of NFC enabled devices will exceed 500 million in 2014.
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. Continued...