Unmanned Systems Beyond Iraq:
What is the Next Step for this Booming Industry?
Lindsay Voss, Industry Analyst
Aerospace and Defense
September 24, 2008

Focus Points
• Market Overview
• Market Attractiveness
• Technology Roadmap
• Market Drivers, Restraints & Trends
• Spending Overview
• Competitive Overview
• Conclusions
Source: U.S. Air Force Source: U.S. Navy Source: U.S. Navy Source: U.S. Air Force Navy
Source: U.S.

Market Overview
Coverage includes Unmanned Air, Ground, and Maritime Systems
Violence in Iraq, Afghanistan and around the world has triggered staggering
triggered
growth in the unmanned systems market
Unmanned Aerial Systems (UAS) represent the largest market segment and the
segment
most mature technology
The Department of Defense (DoD) purchases 95 percent of unmanned systems
sold in the U.S.
The unmanned ground vehicle (UGV) market segment is growing in response to
response
the threat if improvised explosive devices (IEDs)
The DoD is the largest UGV customer, however law enforcement is an expanding
market space
Unmanned Underwater and Surface vehicles comprise the maritime market
market
segment
Unmanned maritime systems (UMS) make up the smallest markets and are the
least mature technologies
The UMS market segment has the least number of entrenched competitors and is
competitors
expected to see the largest amount of growth

Technology Roadmap
Combat Missions
Medical Evacuation Combined Arms Strike Capability Strike Capability
Airlift Engagement
Commercial Use
2030
Ship-deployed Comms
Aerial Refueling Weaponization Armed ASW
Submarine Tracking
Battle Management
Information Operations
Penetrating Strike
Increased Use Use
Civil Civil
2025
SIGINT Collection
SEAD Role
CBRN Detection
Communications Relay Mine Counter Measure
ISR Roles Oceanography
Maritime Patrol Surface Warfare
Perimeter Security Communications
Civil Use
ISR Mission
CBRN Detection
Limited Commercial Use
2015
ISR Missions Reconnaissance
Mine Clearance Maritime Surveillance
DoD Tactical Strike Inspection
Mine Neutralization Maritime Interdiction
Meteorological Research Mine Neutralization
EOD Anti-Submarine Warfare
Border Surveillance Autonomous Mapping
2007
IED Disruption
Limited Civil Use Mine Counter measures
Unmanned
Unmanned Aerial Unmanned Unmanned
Underwater
Systems Ground Vehicles Surface Vehicles
Vehicles

Market Attractiveness Table
This table directly correlates with the market attractiveness grid on slide 5. Market attractiveness is based on concentration of
market competition, market supplier capacity, presence of dominant participants, market revenue potential, and rate of market
growth between 2008 and 2016. On the market attractiveness grid on the following slide the large oval represents the market
in 2007 while the small oval is representative of the market in 2016.
Market Market Supplier Revenue Rate of Dominant
Concentration Capacity Potential Market Participants
Growth
UAS DoD Market Highly High High Medium Yes
concentrated
UAS Civil Fragmented Low Low Low No
UAS Commercial Fragmented Low Low Low No
UGV Market Mildly High Medium Medium Yes
Concentrated
UUV Market Mildly High Low High Yes
concentrated
USV Market Fragmented High Low High No

Most Attractive
Market Attractiveness Grid Attractive
Least Attractive
Most Attractive Markets
High DoD UAS
DoD UAS
UGV Market
UGV Market
Subsystems
Subsystems
Attractiveness
Revenue
Represents the Commercial UAS
market if regulations are lifted
Represents the Commercial UAS
market if regulations don’t change UUV Market
UUV Market
USV Market
USV Market
Represents the Civil UAS Market if
regulations are lifted
Represents the Civil UAS Market if Civil UAS UAV
UAV
Civil UAS
regulations are unchanged Commercial
Commercial
Low
Significant Market Open
Barriers Openness Market

Market Drivers and Restraints
Strong
Drivers
Med
Demand for timely, System interoperability Maturing technologies IED threats are driving
persistent ISR is creating drive market growth system procurement
capabilities drives opportunities Weak
UAS market growth
Entrenched Defense budget Unmanned systems Slowness in decision
competition for UAS constraints result in have liability issues making by the U.S. Strong
and UGVs program cutbacks resulting in few military and other
Restraints
commercial government agencies
opportunities restrains market
growth
Med
Weak

Market Trends
Length of arrows indicate impact of the challenge
Weak Medium Strong
UAS and UGV companies vying for position in the
unmanned maritime systems market segment
Market Trends
Unmanned systems teaming with other unmanned
systems and manned platforms
New R&D programs for the DoD
Increased use of unmanned systems by federal non-DoD entities for
both research and security applications

Spending Overview
Other Federal UAS Spending DoD Services UAS Spending Forecasts
4,000.0
Spending ($ Million)
180.0
3,000.0
160.0
2,000.0
140.0 1,000.0
120.0 0.0
Spending ($ Million)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
U.S. Navy 289.8 507.3 970.1 1,064.3 916.3 763.5 570.2 497.2 471.5 502.9
100.0
U.S. Army 591.7 425.8 502.1 828.6 696.9 632.3 579.9 628.7 640.1 622.7
80.0 U.S. Air Force 1,318.21,663.11,844.21,608.91,500.01,529.01,492.21,325.61,339.71,345.9
60.0
UAS Procurement, RDT&E, O&M
40.0
4,000.0
Spending ($ Million)
20.0 3,500.0
3,000.0
0.0 2,500.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2,000.0
USCG 0.0 1.0 5.3 3.3 2.1 6.9 11.5 9.0 15.7 20.8 1,500.0
DTRA 1.1 3.0 0.8 2.5 5.8 4.3 2.1 0.9 1.5 2.7 1,000.0
500.0
Other 1.5 2.3 3.7 4.8 5.5 10.1 17.8 20.2 22.5 25.7
0.0
NASA 3.2 4.1 6.7 7.7 5.3 6.9 10.1 18.0 25.6 19.1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
USSOCOM 28.2 19.5 31.4 37.8 24.6 29.0 36.9 45.6 37.8 39.0 O&M 136.1 170.6 167.0 195.4 195.3 232.1 244.2 251.5 270.2 297.7
DARPA 15.7 27.8 33.2 18.3 27.9 33.9 25.5 39.0 26.7 20.6 Procurement 703.0 709.8 1,227.0 1,309.5 1,039.1 827.0 647.1 538.3 468.5 468.9
CBP 5.6 27.2 10.1 22.2 35.6 18.7 15.5 28.6 39.0 41.6 RDT&E 1,360.6 1,715.8 1,922.4 1,996.9 1,878.8 1,865.71,751.0 1,661.7 1,712.6 1,704.9

Spending Overview
DoD UGV Spending Forecasts DoD UUV Spending Forecasts
350.0 100.0
300.0
Spending ($ Million)
Spending ($ Million)
80.0
250.0
200.0 60.0
150.0
100.0 40.0
50.0
20.0
0.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0.0
DoD RDT&E 46.7 70.5 77.3 60.5 73.3 61.9 62.9 59.8 62.3 66.3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
DoD Procurement 278.7 217.7 175.5 191.2 199.3 211.3 222.0 223.9 209.1 224.8 Spending 16.9 19.2 20.8 29.0 24.5 31.8 46.2 53.0 68.4 78.3
DoD and Civil UGV Spending Forecasts DoD USV Spending Forecasts
40.0
500.0
35.0
Spending ($ Million)
Spending ($ Million)
400.0 30.0
25.0
300.0
20.0
200.0
15.0
100.0 10.0
5.0
0.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
DoD Spending 325.4 288.2 252.8 251.7 272.6 273.2 284.9 283.7 271.4 291.1
Civil Spending 55.4 57.9 65.8 60.8 69.0 73.6 80.8 89.6 99.7 105.7 Spending 10.3 11.9 12.1 14.2 15.9 21.6 24.9 27.2 33.4 34.2

End-User Overview
The following pie-charts display end-user market share for 2007 UGV End-Users
the UAS, UGV, and UMV market segments. Additional users
of unmanned systems within the United States include the
Department of Justice (DOJ), Central Intelligence Agency U.S. Navy: 58.4%
(CIA), Customs and Border Protection (CBP), Defense
U.S. Army: 36.7%
Advanced Research Projects Agency (DARPA), Defense
Threat Reduction Agency (DTRA), Special Operations U.S. Air Force: 4.5%
Command, Environmental Protection Agency (EPA), National
Other: 0.4%
Oceanic and Atmospheric Administration (NOAA), National
Aeronautics and Space Administration, Research Entities,
and Law Enforcement Agencies
2007 UMS End-Users 2007 UAS End-Users
U.S. Navy: 84.3%
U.S. Air Force:
57.5%
NOAA: 4.6%
U.S. Army: 36.1%
Research: 6.0%
U.S. Navy: 5.6%
Commercial:
3.0% Other: 0.8%
Other: 2.1%

Company Market Share Overview
2007 UAS Company Market Share 2007 UGV Company Market Share
Foster-Miller: 60.4%
Northrop Grumman: 42.8% iRobot Corporation: 23.4%
General Atomics: 20.3%
DOK-ing: 1.2%
AAI Corporation: 19.8%
General Dynamics Robotic
Aerovironment, Inc.: 8.2% Systems: 3.3%
Hydrema: 1.1%
Aurora Flight Sciences: 1.4%
Northrop Grumman: 4.2%
Boeing/Insitu: 2.7%
Other: 4.8% BAE Systems: 1.7%
Lockheed Martin: 2.5%
Other: 2.2%
2007 USV Company Market Share 2007 UUV Company Market Share 2007
EDO Corporation (ITT): 43.3%
General Dynamics Robotic Bluefin Robotics: 37.0%
Systems: 34.3%
Oregon Iron Works: 9.0% Hydroid LLC.: 30.7%
Foster-Miller Inc.: 10.6%
Other: 4.6%
Boeing: 6.2%
Maritime Applied Physics
Corp.: 4.2% ARINC Engineering:
Accurate Automation: 2.0% 4.4%
Lockheed Martin: 2.1%
Robotic Marine Systems, LLC.:
Other: 9.0%
1.7%
Sea Robotics Inc.: 0.9%

Conclusions
The U.S. Unmanned Systems market continues to increase drastically with new technologies and
drastically
new applications
Competition is becoming tighter with less opportunity for new participants across all segments
participants
Subsystems are the hot new market: Sensors, Command and Control, Communications, Guidance
Civil and Commercial markets are an opportunity in the long-term
long-
The U.S. Unmanned Systems market as a whole is positioned to see strong future growth

Your Feedback is Important to Us
What would you like to see from Frost & Sullivan?
Growth Forecasts?
Competitive Structure?
Emerging Trends?
Strategic Recommendations?
Other?
Please inform us by taking our survey.

For Additional Information
• To leave a comment, ask the analyst a question, or receive the
free audio segment that accompanies this presentation, please
contact Stephanie Ochoa, Social Media Manager at (210) 247-
2421, via email, analystbriefings@frost.com, or on Twitter at
http://twitter.com/stephanieochoa.