What was your reaction when it became clear that Canon would bid on Axis?
“My reaction was that there was much logic to it. Historically, it has been important for Axis to have owners who prioritise long-term growth rather than short-term quarterly results. Canon has a very strong reputation for being long-term, and they differ from some of their Japanese competitors in that they have not sold technology components to third parties. As we have come into the group, we get access to those components and that broadens our base of available sensors and lenses, which is attractive for us. All listed companies have a price tag, and you need to be prepared for that. For me it has not been dramatic.”
How has your job changed?
“Not much to be honest. We have a new majority owner and there are some new people on the board and that means new interaction for me, but for Axis as a company really nothing has changed.”
Axis founder Martin Gren has described the acquisition as rational, but very sad. It seems like you do not agree?
“Both yes and no. I agree that there is much rationality in the acquisition, but for me it is not sad – I like change. But as the founder of the company, the situation is of course different for Martin.”
Canon has promised that things will remain as they are.
“Yes, and not only promised, they have guaranteed it, I would say. It is very logical – if you look at it from Canon’s point of view, they have bought a company that has been very successful in an area, which they want to succeed in, and so they will not use their own methods or structures to manage it. The logic is that they want to mirror the approach we have used in order to succeed in the same way.”
How do you cooperate with Canon?
“We have different product portfolios and are competitors on the market. However, how it will develop long term, I cannot really speculate about today. Canon has a big presence in the Japanese market, but generally, they are not very large compared with our competitors around the world and we do not focus on them. If we look at the technology, we believe that we can benefit from Canon’s development of lenses and sensors in the future.”
Will the consolidation process in the physical security industry continue with more major acquisitions?
“It is difficult to say. But if you look at consolidation in general, there should not be as many brands in ten years from now, at least not those who manufacture the products themselves.”
In what markets does Axis have the biggest potential to grow?
“There are no major changes, but the BRIC countries – that are the natural strongholds for growth potential – have recently been challenging in various ways. There are political problems, currency challenges and in China two large competitors have performed amazingly well. At the same time, we see sound development in the more mature markets.”
What is your strategy in China, where Hikvision and Dahua are very strong?
“It is obviously a tougher market – it is their domestic market although no market can be owned by one single player. There is space to compete even though the competition is very hard. Customers in that market perhaps prefer Chinese brands rather than foreign ones to some extent, but there are exceptions and it is important to find areas where we can sharpen our offering.”
Axis continues to do very well. What is your view on future growth?
“It depends a lot on how the emerging markets develop. If we look at estimates from IHS and others, the global video surveillance market is forecasted to grow about 10 per cent annually and the network camera market will grow somewhere between 12-14 per cent in Western Europe and in the Americas, where the majority of our sales are to be found. Then, the growth rate is higher in emerging markets, particularly in China.”
But you aim higher?
“Given our market position, we should be close to the growth rate in the mature markets. But of course, we have a clear ambition to grow faster than the market and we also have an ambition to broaden our offer, not only by taking a more comprehensive view of how much of a video surveillance solution we deliver, but also to look for complementary products that we can produce in a division we have named ”New Business”. It can be completely different products but they might be used adjacent to, or by systems integrators who also sell video surveillance solutions.”
What kind of products do you mean and what are their sales prospects?
“Both our access control solution, the Axis video door station and network connected loudspeaker are examples of things that we have launched recently. They represent a small portion of our businesses today compared with our video surveillance offering, but we will aim to expand on that so that they make a significant contribution to our overall growth eventually.”
How much can they grow?
“A lot! We are starting at low sales levels and it is a challenge. If you want to succeed with innovation in new areas while you already have a very large, dominant and successful business like we have in video surveillance – then I think one must redirect resources very deliberately in that direction, otherwise it will drop down the priority list. The ambition is of course that the growth should be significant within a number of years.
How much is significant?
“It should be two-digit percentages or at least close to that. But this is just speculation, it all depends on what kind of product areas you find; it may well be innovations that are connected to cameras and it might be difficult to discern, and draw a line between what is really ”new” and what is a development of our business. I would like to see innovations from our New Business division that are related to our video surveillance offering.”
Do you think network cameras will be your main source of revenue in the long term – let us say 10 years?
“I think that video and the use of images and various types of sensors will be very important for a long time to come. There will be space to have it as a major part of our business even if we succeed in other areas as well.”
What will the market look like in the future?
“The penetration of network video has primarily happened on the business side and for big solutions. I think we will see more specialised solutions for smaller installations and for different end customer verticals, more differentiation and gradually more and more video analysis.”
Finally, you have been CEO of Axis since 2003. Quite a few CEOs quit once their company has been acquired. How do you see your own future?
“If you do not think it is fun to go to work, it is natural to quit. But I do, and I cannot imagine anything else that would attract me more. For me, this change actually means some new interaction, although as I said, it has not been a very big change for Axis as a company. And I enjoy it. Plus, it is a fun challenge that Canon considers Axis as a very strategic investment. They believe our business area can grow as a part of the Canon Group and it will be a new challenge for us to live up to that.”