Another marked trend is that manufacturers in low-cost countries in Asia and elsewhere are increasing their market shares in the low-price segments of the western world. In some European countries this type of import has increased significantly over the last five years. A change can also be seen in the demand for different levels of security solution. In the past the greatest potential was in the middle segment, but now customers increasingly choose either a high-security solution or a low-priced option.
Differences between markets
Americans spend more than twice as much on panic devices as Europeans. Conversely, northern Europeans spend three to four times as much as Americans on high-security locks for their homes. Automatic doors are also significantly more common in Europe than the USA. And use of electromechanical products is far more widespread in the commercial segment than the residential. If the demand for security and safety solutions were to be the same in Europe and the USA, the total market would be roughly doubled. In the long term there is no reason why the present differences between segments should endure. One of ASSA ABLOY's challenges is to develop the market so as to reduce the great differences between markets and segments that are found today.
The world lock market is still relatively fragmented.
But in individual countries the market is relatively consolidated, since in the industrialized regions of the world it is very common that family-owned companies still hold leading positions on their own home markets. They are well-established and have strong ties with local distribution
networks. However, in the less developed countries, established lock standards and brands are less common.
In the USA Ingersoll-Rand is the largest competitor in the commercial segment and is also strong in the residential segment. Other major players on the American market include Stanley Works and, in the residential segment, Black & Decker.
In EMEA the main competitors are the Swiss company Kaba, which focuses on high-security solutions, and Dorma in Germany.
Imports from low-cost countries provide much of the competition in Australia and New Zealand.
In China the lock market remains fragmented and even the largest companies have low market shares. Tri-Circle, whose business is strongly focused on padlocks, is the largest lock manufacturer in China.
The main competitors in Global Technologies division's segment of global products and solutions are Gemplus, Dorma, Stanley Works and Onity.
USA and Canada
In general the residential segment in the USA currently has lower lock standards than in Europe. Instead, alarms play a major role in security awareness. However, the media are giving more and more coverage to the fact that better locks are a proactive measure while alarms are a reactive measure when damage has already been done.
In the USA and Canada it is important to plan security solutions, via specialist specifiers, at an early stage of the building's planning or design. These specifiers ensure that the security solutions meet all laws and regulations while also offering the highest possible degree of user-friendliness and convenience. Collaboration with architects is often crucial here in creating the best security solutions.
Global-level competitors
There are five main players in terms of competition at a global level.
ASSA ABLOY's total sales by region, %
South America
Much of South America is a fragmented market with few established security standards. However, the region has a major need for security solutions and is a future growth market.
EMEA is characterized by striking differences between different national markets. In many European countries EU standardization of security products is now complete and has become a driver for increased sales. It has raised previously low national requirements and thereby also raised the quality of products. However, standardization only covers the level of security provided, not shape or dimensions. In these respects the national differences remain.
The countries of northern and southern Europe show great differences. Customers in the north generally demand higher quality in residential security products than those in the south.
Most of the countries of eastern Europe currently have a lower standard of locks than many other parts of Europe. Foreign products – e.g. Swedish or German – are generally perceived as superior. However development in eastern Europe is proceeding rapidly and leading to rising standards.
Middle East
The largest markets in the Middle East are Saudi Arabia, Iran, Israel and the United Arab Emirates. Many of the markets in the region have thriving economies. ASSA ABLOY has its strongest foothold in the region in Israel, where Mul-T-Lock is market leader.
Apart from South Africa, most African countries have poor security standards for both the residential and commercial segments. ASSA ABLOY is the market leader in South Africa, which is the largest market in Africa.
Australia and New Zealand
The lock markets in Australia and New Zealand are relatively consolidated, and ASSA ABLOY's companies are the clear market leaders in both countries. The commercial and residential segments each account for about half of Asia Pacific division's sales there.
The residential segment has weakened somewhat, but general growth of the security market remains strong. China currently has relatively poorly developed security standards and produces an abundance of low-quality products that are mostly exported. ASSA ABLOY has established its own manufacturing plants and now faces a challenge in educating and developing the distribution chain towards products offering higher security.
Rest of Asia
In other parts of Asia, ASSA ABLOY is represented by sales offices. The Group has gained a strong position on the South Korean market through its acquisition of BEST Metaline, one of the country's leading suppliers of lock and door fittings and automatic doors. In India ASSA ABLOY has a sales office to provide support to its Indian distributors.
Global products and solutions
Because the technological differences between markets in different countries are small, cards and card readers for both smart cards and traditional contact-based methods of access control form a worldwide product segment. Demand for products of this type continues to increase and growth was strong in 2005. HID is ASSA ABLOY's largest company in the segment. HID's iClass cards hold a significant share of the world market for electronic access control. The market is still fairly fragmented.
ASSA ABLOY Identification Technology (ITG)
The fastest-growing segments of the RFID (Radio-Frequency Identification) market are identification products for electronic passports, banks and payment systems for public transport. The RFID market remains fairly fragmented.
ASSA ABLOY Entrance Systems
There are local differences in requirements for automatic door solutions. Nonetheless, the requirements of the largest customer segments – airports, hospitals, hotels, restaurants and stores – are so similar everywhere that the product
segment is best marketed globally. The market for ASSA ABLOY Entrance Systems is growing and consolidation is continuing.
ASSA ABLOY Hospitality
The primary target group for ASSA ABLOY Hospitality comprises large international hotel chains. The market has shown some recovery after the decline of the last few years. Price pressure in the aviation industry indicates that travel should grow in the future.