An Overview of the Asia Pacific Unmanned Aircraft Systems Market

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Frost & Sullivan analysis of the Asia Pacific Unmanned Aircraft Systems Market

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An Overview of the Asia Pacific Unmanned Aircraft Systems Market

  1. 1. An Overview of Asia Pacific Unmanned Aircraft Systems Market for US Embassy Julius Yeo Consultant, Frost & Sullivan 1
  2. 2. Strategic Thinking – A Helicopter Vision HELP! THE EXCELLENT OBJECTIVE - VISION CAPTURE THIS CUSTOMER COMPETITIVE THREAT RABBIT HOLES RESTRICTED - VERY VISION TEMPTING TO DIVE DOWN 2
  3. 3. Market Spending Overview Unmanned Aircraft Systems Market Industry Dynamics An Overview of Industry Restraints & Challenges Asia Pacific Market Forecasts Market Trends Conclusions and Key Take Aways 3
  4. 4. Market Spending Overview 4
  5. 5. Global Defense Budget are increasing, more so for Asia Pacific in the future. Military budgets will continue to be under strain because of increasing costs of complex defense systems Global Defense Budgets ( 2008 – 2017) North America Europe Asia Pacific Middle East Rest of the world US $ Million 2500 2000 1500 1000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5
  6. 6. Global Military UAV Market Share by Geography (2008) Asia Pacific, Middle East, 5% ROW , 1% 18% USA , 62% Europe, 14% USA Europe Asia Pacific Middle East UAV Market Spending by Geography (2008) United States will continue to US $ Billion contribute the most in UAV 3 spending. Asia Pacific currently 2nd 2.5 in UAV spending, is still in its 2 infancy stage for UAV developments 1.5 and it will continue to look to the 1 west for procurement of UAV 0.5 systems for the short and mid term outlook. 0 USA APAC Europe Middle East ROW 6
  7. 7. Industry Dynamics 7
  8. 8. Contributing Factors and Influences that drives the UAV Growth in Asia Pacific Strategic national technology position Unstable states with internal political tensions Regional conflicts among neighbors Expansive sea area and long coastlines Strong regional economic growth Development of Network Centric Network concept Support from individual governments for UAV development programs Source: Frost & Sullivan 8
  9. 9. Geographical Influences Conflict locations due to political tensions, border stand-offs, land claims, and domestic insurgencies. Security threats such as piracy, military stand- offs, and others requiring maritime operations. Potential locations for occurrence of natural disasters. Source: Frost & Sullivan 9
  10. 10. Industry Restraints & Challenges 10
  11. 11. Unmanned Aircraft Systems Market: Impact o Industry Restraints, 2008-2016 Industry Restraints Impact 1-2 Years Impact 3-4 Years Impact 5+ Years Existing manned aircraft capabilities Medium Medium Medium Procurement cost Medium Medium Medium Technology handling capabilities Medium Medium Medium Timely development duration Medium Medium Medium Unmanned Aircraft Systems Market: Impact to Industry Challenges, 2008-2016 Industry Challenges Impact 1-2 Years Impact 3-4 years Impact 5+ Years Doctrines and Polices High High High Economics High High High Regional Factors High High High Operational Capabilities High High High Industrial High High High 11
  12. 12. Market Forecasts 12
  13. 13. Frost & Sullivan forecasts that the CAGR for the revenue growth rate from 2007 to 2016 will be 4.4 percent. Market Spending Forecasts UAV Market: Spending Forecasts for Asia Pacific, 2007-2016 1200.0 30.0 Revenue Growth Rate (%) 1000.0 20.0 Spending ($ Million) 800.0 10.0 600.0 0.0 400.0 -10.0 200.0 -20.0 0.0 -30.0 7 9 1 2 3 4 5 6 8 0 0 0 1 1 1 1 1 1 0 1 20 20 20 20 20 20 20 20 20 20 Year Revenue ($ Million) Revenue Growth Rate (%) Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan 13
  14. 14. Total shipment forecast in the future will fluctuate in the reels of US$600 million on a sustainable basis. Total UAV EIS Trends UAV market: Total Unit EIS Forecasts (Asia Pacif ic), 2007- 2016 1200 Shipment Forecast ($ Million) 1000 800 600 400 200 0 07 08 09 10 11 12 13 14 15 16 20 20 20 20 20 20 20 20 20 20 Years Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan 14
  15. 15. Tactical UAV will continue to dominate the UAV market in Asia Pacific. Forecasts and Trends by UAV Types UAV Market: Unit Shipment Forecasts and Trends by UAV Types (Asia Pacific), 2007-2016 1200 1000 Shipment Forecast ($ Million) 800 HALE MALE 600 VTOL TUAV 400 200 0 07 08 09 10 11 12 13 14 15 16 20 20 20 20 20 20 20 20 20 20 Years Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan 15
  16. 16. Market Trend 16
  17. 17. With the adoption of network centric warfare by countries within the Asia Pacific region, TUAV will have a critical role. Market Share by UAV Type •Tactical Unmanned Aerial Vehicles or TUAV, are expected to Forecast of UAV Market: Percent of Market Share by UAV lead the UAV market in Asia Pacific from 2007 to 2016. Types (Asia Pacific), 2007 - 2016 HALE •The High Altitude Long Endurance (HALE) UAV market will be 11% driven predominantly by more advanced countries in terms of military capabilities. Frost & Sullivan expects Singapore, MALE Australia, South Korea, and Japan to be the leaders in the HALE 31% UAV procurement. • Frost & Sullivan projected the strongest growth for Medium Altitude Long Endurance (MALE) UAVs between 2011 to 2015. As a result, MALE will take away some market share from HALE TUAV 43% • VTOL was inducted for usage in Japan in the early days, however this system has not garnered sufficient support from the other countries in the Asia Pacific. However, Frost & Sullivan VTOL expects the market share of VTOLs to increase in the later stages 15% of the forecast period due to enhanced technologies handling capabilities and new naval defense article procurement. Source: Frost & Sullivan 17
  18. 18. Unmanned Aerial Systems Market Segmentation – market will move beyond the “ Dull, Dirty, Dangerous” tasks highlighted in the past – “Deep” and persistent operations are the key application now 40,000 Payload Capacity (kg) 400 - 2000 HALE 60 - 400 MALE 5 - 150 Altitude (ft) 0-5 20,000 TUAV VTOL MUAV 50 500 5000 Range (km) 18
  19. 19. Shipment Forecast ($ Million) 40 35 30 25 • Malaysia UAV market is estimated to worth 20 15 about US$90 million over 2009 -2015 10 5 • Maritime operations and coastguard continue MALAYSIA 0 to drive most of the UAV sales 07 08 09 10 11 12 13 14 15 16 20 20 20 20 20 20 20 20 20 20 Year 180 Shipment Forecast ($ Million) 160 140 120 • Taiwan UAV market is expected to be 100 worth US $600 million over 2009-2015 80 60 40 • Threat of mainland China and territorial TAIWAN 20 dispute will drive the sales 0 07 08 09 10 11 12 13 14 15 16 20 20 20 20 20 20 20 20 20 20 Year *All values along the Y Axis represent the UAV sales in Dollar value in Millions. 19
  20. 20. 30 Shipment Forecast ($ Million) 25 20 • Indonesian UAV market is expected to be worth 15 US$125 million over 2009 – 2015 10 • Ultra terrorist movement and territorial dispute 5 drive the sales INDONESIA 0 07 08 09 10 11 12 13 14 15 16 20 20 20 20 20 20 20 20 20 20 Year Shipment Forecast ($ Million) 80 70 60 • Thailand UAV market is expected to be worth 50 US$300 million over 2009 – 2015 40 30 20 • Thailand demand for UAV will be primarily driven THAILAND 10 by internal security threat 0 07 08 09 10 11 12 13 14 15 16 20 20 20 20 20 20 20 20 20 20 Year *All values along the Y Axis represent the UAV sales in Dollar value in Millions. 20
  21. 21. Japan can be the global developer of UAV technology if international military restriction is lifted. China is seen as a “up and coming force” in the UAV market Frost & Sullivan has identified various countries in Asia Pacific that it believes will the leaders in UAV technology and systems export. Although many countries have set up indigenous development programs, the lack of technical expertise and funding has hindered the progress, thus forcing these countries to procure off-the-shelf UAVs from non-domestic suppliers. The following chart segments the region to three tiers based on the UAV export capabilities of respective countries. It should be noted that although Japan should fall into Tier 1, international arms and weapons trade restrictions has significantly hampered its UAV development programs. In the event, these restrictions are lifted, Japan is expected to be one of the global leaders in UAV technology. China is working toward self-reliance due to various restrictions imposed on the country. However, if China is successful in its efforts, it will not be too long before Chinese-made UAVs are seen over Asia Pacific’s airspace. TIER 1 South Korea, Australia, Singapore TIER 2 China, India, Japan TIER 3 Indonesia, Malaysia, Thailand Source: Frost & Sullivan 21
  22. 22. Conclusion & Key Takeaways 22
  23. 23. Conclusion & Key Takeaways • Frost & Sullivan believes that the Unmanned Aerial Vehicle (UAV) market in Asia Pacific will experience a sustained growth from now to 2016. • UAV development program is still in its infancy stage as compare to Western counterparts, but spending is projected to increase on a sustainable basis. • Most countries have set up UAV development programs, but are yet to obtain the necessary expertise to support advanced indigenous UAV designs. The urgent need to improve on military capabilities will drive almost all Asia Pacific countries to procure non-domestic UAV designs. . • The UAV market in Asia Pacific will be led by Tactical UAVs (TUAVs), and followed closely by Medium Altitude Long Endurance (MALE) UAVs. 23
  24. 24. Key Contact Asia Pacific Julius Yeo Consultant Aerospace & Defense Practice Asia Pacific DID +65.68900.989 FAX +65.68900.988 HP +65.8133.9195 EMAIL julius.yeo@frost.com WEB www.aerospace.frost.com 24

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