Unmanned aerial vehicle market to soar, according to Global Market Insights
The commercial drone/unmanned aerial vehicle (UAV) market is set to grow from its current market value of more than $2 billion to over $17 billion by 2024. A report by Global Market Insights reveals that the growth of the market will be driven by increasing venture capital investment in the market space. In 2016, there were about 105 deals worth approximately $541 million. It was estimated that the investment in commercial drones moved from hardware to software in 2017 with the venture capitals (VCs) targeting end-to-end solutions, software, and counter-drone technology. One of the most important investments in 2017 was of 3D Robotics for about $53 million Series D round from Atlantic Bridge CapitalTrue, VenturesFoundry, and GroupMayfield.
The funding has followed the transition from hardware to software services. The commercial drone market companies that led the funding were targeting industrial and enterprise inspection. With an ever-growing adoption of commercial drones, this implies great affordability for businesses and operators. Additionally, manufacturing techniques of computer chips, economies of scale, and software advances are driving the cost of drone sensors and platforms and solutions.
Another factor driving the growth of the commercial drone market is the increasing range of civil applications. Early applications for commercial UAVs involved video and photography. In addition to those uses, within the past several years, their capabilities have been leveraged by industry sectors such as agriculture, real estate, architecture, construction, delivery, and media.
Drones are increasingly used in smart agriculture practices for a range of applications such as planting, soil and field analysis, crop monitoring, health assessment, crop spraying, and irrigation in the complete crop cycle. Other use cases include producing a precise 3-D map for soil analysis, which can guide in planning of seed planting patterns. A drone-driven method of soil analysis, which offers data for nitrogen level and irrigation management, is also expected to drive the commercial UAV market demand.
Aerial photography is a common application area. The growth of the commercial UAV market is enhanced by the increasing adoption in the media and entertainment industry for photography and filming. Drones are useful in reporting events for capturing footage for news and broadcast. For instance, BBC is using drones for capturing footage in sports competitions and has its own in-house drone team. In addition, the growing applicability in wildlife photography is augmenting the demand of UAVs for aerial photography applications.
Inspection and monitoring applications are anticipated to gain substantial growth during the forecast period. UAVs have been used in the management of various types of infrastructure. Industry verticals such as energy and utility, railways, and roads can benefit from the technology for asset monitoring and inventory management. Their ability to perform hazardous work and acquire various data sets with accuracy and cost effectively is one of the major factors driving the demand of UAVs for inspection and monitoring. Real-time data provided by these devices is also augmenting the demand in inspection and monitoring applications.
Factors that could hinder the growth of the UAV market are stringent government regulations on the commercial use of drones and security and privacy issues. Civil drones that are used for non-military purposes bring vulnerability to cyber-attack and misuse by criminals, which use unencrypted data links for control, navigation, and command. Due to this vulnerability, hackers have attempted to intercept, jam, and manipulate drone controls for exploitation. However, the increasing awareness of the benefits and features of commercial UAVs and approval of government authorities, such as the U.S. Federal Aviation Administration (FAA), will be primary factors driving the market growth of commercial UAVs.
Technological advancements and innovations in the commercial drone marketspace are also expected to drive the revenue. The integration of artificial intelligence and advanced machine-learning algorithms has developed several new avenues for use of UAV capabilities. For instance, the retail industry is leveraging the capabilities of drones to deliver packages. In December 2016, Amazon successfully completed one of the first ever commercial deliveries in Cambridge, UK. Similarly, Zipline, a U.S.-based robotics company, deployed its fleet of drones to deliver blood in Rwanda to provide medical relief in remote areas of the East African region. The company plans to use the capability of civil drones to establish one of the largest drone delivery networks in Tanzania.
The commercial UAV industry is experiencing a phase of expansion with new trends and technologies coming into the market, revolving around data. These include artificial-intelligence-powered UAVs and drone data, which enterprises access for making feasible and informed decisions. Commercial UAV systems are complex, and machine learning and AI can aid in studying and understanding the data to provide quick analysis and insights. For instance, customers using cloud by Kespry, a computer software company, can reap benefits from detail-oriented roof models, inspection-quality tools, and images such as automated hail damage detection. These tools aid in easy and fast generation of consistent and accurate assessments over the enterprise.
In terms of types of drones, the rotary-blade drone market dominates the demand and includes both single- and multi-rotor products used in a range of commercial applications. Rotary-blade drones have highly capable rotor mechanisms with more advantages compared to fixed-wing drones and can achieve better flight control. Rotary-blade drones also can be used to deliver packages with higher payloads.
As far as mode of operation, the autonomous commercial UAV market is expected to gain substantial growth during the forecast period. Autonomous drones are powered by AI and advanced machine-learning algorithms, which allow them to learn and perform better with every flight. Because they operate on their own and do not require human intervention, autonomous UAVs can be used to perform hazardous tasks, and to do this with high accuracy and cost effectively.
In terms of region, North America is leading the commercial UAV market because of increasing adoption for capturing and discovering of events through filming, video, and aerial photography. The relaxation on the use of UAVs for commercial applications by the FAA is also estimated to contribute toward the growth of the market. In addition, supportive government initiatives foster the growth of the market in this region. For instance, in 2017, the U.S. government launched a program to increase the testing of commercial UAVs to include nighttime operations, flights beyond the visual line of sight (VLOS), and flights flown over people. The program is said to be expediting the integration of UAVs into the NAS and test UAV tracking and detection and is expected to have substantial impact on the growth of the commercial UAV market. In addition, the presence of a large number of players such as Aeryon Labs, 3D Robotics, and PrecisionHawk is driving the growth of the market.
The Asia Pacific region is expected to gain substantial growth during the forecast period because of the rapid increase in awareness for civilian drone applications and relaxation by government for the use of UAVs for commercial purposes. Also, the presence of a large number of drone manufacturers in the region (e.g., DJI and Xiaomi), particularly in China, is expected to drive the growth of the commercial UAV market.
Major vendors in the commercial UAV market include 3D Robotics, Airobotics, AeroVironment, Airware, Amazon Prime Air, Bae Systems, Cyberhawk Innovations Ltd., DroneDeploy, DJI, Ehang Inc., Hoverfly Technologies, Intel Corporation, Parrot, PrecisionHawk, senseFly, and Yuneec International. These players are leveraging strategies such as product launch and strategic alliance to enhance their product portfolios and gain market share. For instance, in January 2017, DJI acquired Hasselblad, a Swedish camera company. The acquisition will strengthen DJI’s presence in the high-end camera drone landscape by combining DJI’s aerial drone technology with Hasselblad’s cameras. In another acquisition, in February 2018, PrecisionHawk acquired AirVid and Droners.io to launch one of the biggest networks of commercial operators in the world.
For more information or to order a copy of the report, go to https://www.gminsights.com/industry-analysis/unmanned-aerial-vehicles-UAV-commercial-drone-market.