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Commercial Drone Market Sector Forecasts

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Presentation from 2016 Commercial UAV Expo: MARKET SECTOR FORECAST FROM UAV INSIDER: WHICH ARE GROWING AND WHICH AREN’T PANNING OUT

Forecasts from a wide variety of research firms deliver growth projections for the commercial UAV market that are nothing short of phenomenal. But how real are they? And what’s the right number for the various market sectors? Is precision agriculture really the Holy Grail everyone predicted? And what about the process & power, infrastructure inspection, construction, and mining sectors? How fast will that grow? Will they onboard or use service providers? And how significant is the inability to fly beyond visual line-of-sight for these sectors? The good news is with the advent of the FAA’s Small UAS Rule and exception process for commercial operations in U.S. airspace we now have a better framework to project growth. In this session you’ll get an industry insider’s take along with statistics from survey-based research to understand the business impact and opportunities or challenges ahead.

Published in: Technology

Commercial Drone Market Sector Forecasts

  1. 1. 1|Copyright ©2016 Skylogic Research, LLC MARKET SECTOR FORECAST FROM UAV INSIDER: WHICHAREGROWINGAND WHICHAREN’TPANNING OUT
  2. 2. 2|Copyright ©2016 Skylogic Research, LLC “It’s tough to make predictions, especially about the future.” – attributed to Yogi Berra
  3. 3. 3|Copyright ©2016 Skylogic Research, LLC Topics Forecasts: diversity, hype, rumor, and wonk Investor sentiment Outlook for sectors
  4. 4. 4|Copyright ©2016 Skylogic Research, LLC Forecasts: diversity, hype, rumor, and wonk $2B - $127B
  5. 5. 5|Copyright ©2016 Skylogic Research, LLC Diversity We are currently tracking 50 different forecasts! Most reports sell between $2,000 and $6,000
  6. 6. 6|Copyright ©2016 Skylogic Research, LLC Diversity Source: PwC Source: Goldman Sachs Most drone market forecasts overlook the largest commercial sector: Film/Photo/Video a TAM is not a forecast
  7. 7. 7|Copyright ©2016 Skylogic Research, LLC Hype “Precision agriculture and public safety will make up more than 90% of the market growth for unmanned aerial systems.” The report confidently states, “…the commercial agriculture market is by far the largest segment, dwarfing all others.”
  8. 8. 8|Copyright ©2016 Skylogic Research, LLC Rumor Q. What was the impact of FAA’s consumer drone registration on holiday sales? A. NPD Group says some slippage at first, but in the end sales were up YoY
  9. 9. 9|Copyright ©2016 Skylogic Research, LLC Wonk 5% 1% 1% 1% 2% 4% 7% 18% 24% 38% 5% 1% 2% 2% 4% 5% 11% 19% 26% 26% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Other (DIY, used, etc.) Action sports / outdoor retailer General merchandise big box retailer Vertical market reseller General camera / audio / video retailer Big Box electronics retailer General hobby store Amazon or eBay Directly from manufacturer Dedicated drone dealer/distributor Past Future n = 640 Source: Skylogic Research Qs. Where did you buy / where will you buy your next drone? NPD data misses most of this
  10. 10. 10|Copyright ©2016 Skylogic Research, LLC Wonk “On average, exemptions list two unmanned aircraft types that will be used in operations. The most popular unmanned aircraft maker is DJI, which accounts for two out of three drones listed across all exemptions.” Center for the Study of the Drone at Bard College: Analysis of U.S. Drone Exemptions 2014-2015 Many – including DJI – believe this affirms their “70% market share” claim. But this is not unit market share. It is only what is listed on the application as what they “might use” - not what they actually own or even will use. “Echo Chamber” Image: DJI
  11. 11. 11|Copyright ©2016 Skylogic Research, LLC Commercial UAS aircraft (N-number) 1805 197 134 127 0 200 400 600 800 1000 1200 1400 1600 1800 2000 DJI 3DRobotics Precisionhawk AscTech DJI = 46.3% Overall As of 3/31/2016 - Source: sUAS News See more here:
  12. 12. 12|Copyright ©2016 Skylogic Research, LLC Most popular brands Q. What was the brand of your last drone purchase? 50% 7% 4% 3% 3% 2% 2% 2% 2% 4% 20% DJI 3D Robotics Yuneec Blade Parrot Event 38 Hubsan FreeFly Systems Syma Custom Others (<2%) Source: Skylogic Research n = 647 DJI’s overall market share in North America is about 50 percent—not 70 percent as popularly described. insight SEVEN
  13. 13. 13|Copyright ©2016 Skylogic Research, LLC 1.8 1.2 7 55 107 450 234 1 2 2 13 29 74 31 -5 5 15 25 35 45 55 65 75 0 50 100 150 200 250 300 350 400 450 500 2010 2011 2012 2013 2014 2015 Q3 2016 Dollars ($)M Deals Investor sentiment Source: CB Insights Dear John Drone, I’ve found somebody else. Signed, VC
  14. 14. 14|Copyright ©2016 Skylogic Research, LLC Outlook for sectors
  15. 15. 15|Copyright ©2016 Skylogic Research, LLC U.S. Drone Sales Revenue Forecast (in 000’s) – all price points $1,526,004 $2,334,786 $2,918,483 152% 113% 87% 0% 20% 40% 60% 80% 100% 120% 140% 160% $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 2016 2017 2018 Projected CAGR Source: Skylogic Research $2.9B in 2018
  16. 16. 16|Copyright ©2016 Skylogic Research, LLC Drone purchases – price points Q. What was the price of your last drone purchase? 17% 13% 34% 18% 9% 7% 2% 1% 0% 5% 10% 15% 20% 25% 30% 35% 40% Less than $500 $500 - $999 $1,000 - $1,999 $2,000 - $3,999 $4,000 - $7,499 $7,500 - $34,999 $35,000 - $99,999 More than $100,000 n = 650 Source: Skylogic Research More than half of all buyers purchase drones costing between $1,000 and $4,000 insight SEVEN
  17. 17. 17|Copyright ©2016 Skylogic Research, LLC Drone purchases - usage Descriptor Price Range Hobby Use Commercial or Government Use Consumer Less than $500 73% 27% $500 - $999 65% 35% Prosumer $1,000 - $1,999 39% 61% Professional $2,000 - $3,999 11% 89% $4,000 - $7,499 3% 97% $7,500 - $34,999 0% 100% $35,000 - $99,999 0% 100% More than $100,000 0% 100% Source: Skylogic Research “Prosumer” category is narrow. ASP = $1400 insight FIVE Most drones (85%) costing more than $2,000 are purchased for professional use. Key insight FOUR
  18. 18. 18|Copyright ©2016 Skylogic Research, LLC User survey Q. What is the primary intended use of your drone purchase? Film/Photo/Video accounts for 43% of intended commercial use and constitutes the largest commercial market sector insight FOUR 37% 16% 13% 7% 6% 6% 4% 3% 8% Commercial photo / video Survey and mapping Inspection / monitoring Precision agriculture Academic research Cinematography First responder Testing and R & D Other Source: Skylogic Research
  19. 19. 19|Copyright ©2016 Skylogic Research, LLC Current environment Uncertain future Mapping Photo / Video Structural Inspection Sports Real Estate Cinematography Search and Rescue Surveying First Responders Precision Agriculture Package Delivery Linear Inspection (rail, oil, power) Border Patrol Fish and Game VLOS BVLOS Source: Gryphon Sensors and Skylogic Research Sector challenges Construction
  20. 20. 20|Copyright ©2016 Skylogic Research, LLC Sector Scorecard = Few = Several = Many Source: Skylogic Research Precision Agriculture CivilInfrastructureConstruction Energy & UtilitiesFilm /Photo /VideoM ining& Aggregates PublicSafety & 1stResponders Surveying & M apping OVERALL SECTOR OUTLOOK Challenges: Access permissions BVLOS operations Data capture resolution and accuracy Data governance and chain of custody Data processing bottleneck Incumbent technology and players Intellectual property Nighttime flights Occlusions and obstacles Privacy rights Worksite safety SOPs Standards and practices State and local restrictions Terrain and object height autonomy Workflow and legacy software integration *VRT adoption rate OUTLOOK = drone usage and micro-economic benefit
  21. 21. 21|Copyright ©2016 Skylogic Research, LLC Find out more - articles and free research reports Commercial UAV News http://www.expouav.com/news/ Skylogic Research http://droneanalyst.com/research/
  22. 22. 22|Copyright ©2016 Skylogic Research, LLC Questions?
  23. 23. 23|Copyright ©2016 Skylogic Research, LLC About Skylogic Research, LLC is a research, content, and advisory services firm supporting all participants in the commercial unmanned aircraft systems (UAS) industry. We help you make critical investment decisions with confidence by providing research- based insights on the commercial drone markets. Our focus is on the needs of three constituents: • Manufacturers, suppliers, and business service providers – who need research and insight into buyer needs • Buyers of UAS technology and services – to help inform their acquisition decisions • Investors – who need to distinguish technical and market viability This focus, plus research as a foundation and reach into a community of more than 80,000 business executives and innovators through social media and media partnerships, allows Drone Analyst to deliver a high-value, low-risk method for achieving optimal understanding. Drone Analyst is the brand name and trademark of Skylogic Research, LLC Learn more: Web http://droneanalyst.com Twitter @droneanalyst Email colin@droneanalyst.com
  24. 24. 24|Copyright ©2016 Skylogic Research, LLC ©2016SkylogicResearch,LLC. Allrightsreserved. This publication is approved for public release and distribution under the terms of the Commercial UAV Expo. Drone Analyst products and services mentioned herein as well as their respective logos are trademarks of Skylogic Research, LLC. These materials are provided by Skylogic Research are for informational purposes only, without representation or warranty of any kind, and Skylogic Research shall not be liable for errors or omissions with respect to the materials. In particular, Skylogic Research has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and Skylogic Research strategy and possible future developments, products, and/or research directions are all subject to change and may be changed by Skylogic Research at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, research notes, or web content.

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