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Drone Market Research 2016 - How is it Shaping Up?

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Drones are at the forefront of revolutionizing market across various application areas. The current consumer base of non-military drone is around 1 million and market size estimated to be 9 Billion USD & 12 Billion USD in 2015 respectively for Military & Non-Military Drones. There are 3 categories of model- Entry Level Hobbyist priced at $300-$500 per kit, next level devices from around $750 per kit, Enterprise models costing from $10000 and up.....

This presentation is a result of personal market research project and intended to be used as a reference to derive useful insights. All the facts have been taken from trusted business intelligence sources mentioned at the 'Decision Support References' page at the last. Please feel free to send in your queries at partha2ch@gmail.com

CONTENTS-

Executive Summary…………………………………………….3
Application Areas………………………………………………..4
Executive Summary—Market Measurements……………....5-6
Key Trends Shaping Drone Market……………………………7
Top 3 Growth Drivers……………………………………………8
Top 3 Challenges……………………………………………10-12
Market Size and Forecast……………………………………..13
Decision Support References……………………………...14-15

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Drone Market Research 2016 - How is it Shaping Up?

  1. 1. Drones Market Research By Partha Chowdhury partha2ch@gmail.com March 2016
  2. 2. 2 Contents Executive Summary…………………………………………….3 Application Areas………………………………………………..4 Executive Summary—Market Measurements……………....5-6 Key Trends Shaping Drone Market……………………………7 Top 3 Growth Drivers……………………………………………8 Top 3 Challenges……………………………………………10-12 Market Size and Forecast……………………………………..13 Decision Support References……………………………...14-15
  3. 3. 3 Executive Summary Drones are at the forefront of revolutionizing market across various application areas. The current consumer base of non-military drone is around 1 million and market size estimated to be 9 Billion USD & 12 Billion USD in 2015 respectively for Military & Non-Military Drones. There are 3 categories of model- Entry Level Hobbyist priced at $300-$500 per kit, next level devices from around $750 per kit, Enterprise models costing from $10000 and up. Drones can be further categorised based upon application– Cargo Delivery System, Surveying, Aerial Photography & Video etc. Some of the crucial factors that influence consumer decision are Speed, battery life, weight of the equipment, direct control distance. Forecast for global non-military drones market is pegged to grow at CAGR of 11.5% between 2016-2020 and for military drone at CAGR of 5.2%. Drones has seen surges in demand also because of the demand in hobbyist consumer electronics. Other electronic devices are adding to the hysteria of flying drone like increasing use of smartphones and tablets. Consumers have the option to fly drones using smartphones and other smart devices. $12 $22 $0 $5 $10 $15 $20 $25 $30 $35 $40 2014 2015 2016 2017 2018 2019 2020 Billion Global UAV Market Projection Non-Military Military
  4. 4. 4 Application Areas AERIAL PHOTOGRAPHY & VIDEO MAPPING SURVEYING SEARCH AND RESCUE INSPECTIONS UNMANNED CARGO SYSTEM DHL “Paketcopter” for parcel delivery
  5. 5. 5 Forecast Period Market Growth Rate 11.5% (non- military) 5.2% (military) (CAGR, 2016-2020) Market Concentration 70% (% of market share held by top 3 companies) Executive Summary—Market Measurements Market Stage Growing Market Revenue $12 B (non-military) (2015) Market Units/Volume 1,000,000 (non-military drone) (2015) Average Price Per Unit $400(Entry Level) $10000 (Enterprise) Market Size for Last Year of Study Period $12 B (non- miltary) $9 B (military) (2015) Base Year Market Growth Rate 3% ( Military) 4.4% (Non- Military) (2014 to 2015 growth) Total Drone Market, Global, 2015 Market Overview Stable IncreasingDecreasing Note: All figures are rounded. The base year is 2015. Source: Trusted Business Intelligence Reports.
  6. 6. 6 Number of Registered Competitors 441 Top 3 Companies DJI, Parrot, 3D- Robotics Number of Major Competitors 3 (active market competitors in base year) Executive Summary—Market Measurements (continued) Competitor Overview Stable IncreasingDecreasing Current Potential Users* 1 M * Note: All figures are rounded. The base year is 2015.
  7. 7. 7 Key Trends Shaping Drone Market Reduced cost of Development Increasing Consumer base – Early Adopters Regulations coming into effect Increase in High Altitude, Long Endurance Drones Drone is one of the most talked about topic in recent times due to its untapped potential applications. This market is also seeing increase in demand as the modern consumer gets richer technology experience in terms of high-end gadgets. It works with smartphone and tablets, that makes it pro consumer choice technology. Also penetration rate of internet is helping in increasing consumer base of early-adopters. It is very important factor because those people will go on exploring possibilities of drone application, who are open to innovative technologies and falls under early adopter category. Drones have an appeal of remote control devices with high definition photography capability, plus the enjoyment similar to kite flying. Another factor that is shaping up the drone market is reduced cost of development of drone. Sensors and lenses were used extensively in drones and with advancement of manufacturing technology, these costs are reducing gradually. Also, a smartphone or tablet can be used to control drones removing the cost of controller. Drones uses gyroscope and accelerometer that is already in bulk production because of high demand of smartphones. This is leading to reduction in overall cost of development.
  8. 8. 8 Top 3 Growth Drivers Technological Innovation Rise in demand for Last-mile delivery Internal & External Security concerns Drones are very popular video surveillance products and also finding its application in many other areas. Even though drone market is at early stages in its lifecycle, but still it is strongly expected to grow in volumes and application in coming five years. One of the most important factor that will drive this growth in drone market, is technological innovations. Drone development cost is heavily depended on utilized power to increase fly time, modern sensors and associated controlling device cost. Consumer devices are becoming more advanced and at the same time cheaper also. As per research, there are 1860 million smartphone users globally and its further increasing. These devices are helping to boost drone market as associated compatible sensors & controlling devices that the user is well equipped to use in daily life. Another major factor contributing to the hysteria of drone market is the need for last-mile delivery with minimal human interventions. There are certain cases where in order to improve value chain, e-commerce and other companies are seeking drone concepts to ensure timely delivery of packages, even at places where humans may take more time to reach.
  9. 9. 9 Top 3 Growth Drivers.. Contd. Technological Innovation Rise in demand for Last-mile delivery Internal & External Security concerns The concept of getting drones delivered packages is still under scrutiny in many regions due to security concerns. But companies like Amazon, DHL, e-Bay etc. are leaving no stone unturned to explore uses of drone to improve their business potentials. The very concept of last-mile delivery by drone where a person getting his/her ordered package delivered right outside the 10th floor balcony by a drone, is gaining popularity among consumers. Application of drone is also being tested to reduce HIV testing waiting time for infants in Malawi by UNESCO. In a normal process, it takes 11 days for the sample to reach testing laboratory from health centre and another 8 weeks for the results. Application of drone by UNESCO here, will dramatically reduce such waiting time. Another important factor driving the drone market growth, is the need for increased security at remote areas where human intervention is difficult. Especially in Defense sector drones have been used as a weapon at many times and requirement of expert drone flyer too is increasing.
  10. 10. 10 Top 3 Challenges Legal, Privacy issue and Regulatory Policies Hardware cost for viable application Spectrum Allocation and integration in national airspace Drone market has strong reason to grow in future, at the same time it is facing some crucial challenges ahead. One of the first being uncertainty in regulations as there are no set norms citing approved manufacturers, specifications, applications etc. Some regions like USA, has come up with certain norms regarding drone (also known as UAS- Unmanned Aircraft System) registration and exemption for commercial uses. In the first such drive in 2015 around 1,81,000 drones got registered in USA under Federal Aviation Administration (FAA) and this number will increase further. But many regions still lack basic regulations that is keeping drone manufacturers in dilemma regarding specifications and its application. Drone sometimes can infringe public privacy as it tends to hover unrestricted and thus transmitting photographs/videos of its surrounding. There is concern for trespassing and privacy issues which is still under debate in many regions. If these regulations and legality gets proper shape in future then drone market poised to be a game changer for many markets.
  11. 11. 11 Top 3 Challenges.. Contd. Legal, Privacy issue and Regulatory Policies Hardware cost for viable application Spectrum Allocation and integration in national airspace Drone cost is an important factor for volume growth in many applications. Technological advances helps to reduce cost of associated device but the demand of rigid hardware for certain application is keeping the cost at high. Drone flying over a longer period is considered a challenging task. Any hobbyist can fly a drone, but flying at even 50 km/hr in 3 dimension with just a camera view, is difficult for trained professionals sometimes. Surrounding environments, winds & sudden cloud burst can interfere with the electronics and the drone may lose control. There were several reports of drone crashes. Anti-collision feature in drones add to the hardware cost & weight of the drone. Also, one of the most sought after application of drone, drone delivery, is viable only if the hardware is lightweight enough and at the same time cost of delivery of upto 10 Kms remain between $8 and $12. This cost is unlikely to go down in coming years, and so the hardware cost of such equipment is going to be high.
  12. 12. 12 Top 3 Challenges.. Contd. Legal, Privacy issue and Regulatory Policies Hardware cost for viable application Spectrum Allocation and integration in national airspace Many regions is not having set norms on how much air space a registered drone should be utilizing to avoid collisions, unwanted uses and avoid interference with present air navigation system. In order to accommodate such system, present air navigation grid need to be revamped and advance technology needs to be implemented. Another important factor is communication between several drones and its controllers will become challenging as wireless spectrum is costly resource.
  13. 13. 13 Market Size and Forecast The current user base of non-military done is around 1 million units and the numbers are farther increasing as favourable norms getting shaped. In 2015 the market size of non-military drone is estimated at $12 Billion USD and forecasted to grow to $22 Billion by 2020 at CAGR 11.5%, between 2016-2020. Similarly military drone market size is estimated at $ 9 Billion USD in 2015 and forecasted to grow to $12 Billion USD by 2020 at CAGR of 5.2%. $12 $22 $0 $5 $10 $15 $20 $25 $30 $35 $40 2014 2015 2016 2017 2018 2019 2020 Billion Global UAV Market Projection Non-Military Military
  14. 14. 14 Decision Support References • http://www.dhl.com/content/dam/downloads/g0/about_us/logistics_insights/DHL_Tren dReport_UAV.pdf • “Technology, Media & Telecommunications Predictions 2015”, Deloitte • http://www.forbes.com/sites/kellyphillipserb/2015/12/15/faa-announces-registration- requirements-new-drone-tax/#112447d652b5 • http://www.roboticstomorrow.com/article/2016/01/top-three-quadcopter-drone- companies-are-from-china/7475 • http://www.unaids.org/en/resources/presscentre/featurestories/2016/march/2016031 7_malawi_drones • http://fortune.com/2014/10/08/drone-nation-air-droid/ • http://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/ • http://fortune.com/2016/01/06/federal-drone-registration-system/ • List of Commercial Drone Manufacturers: http://www.uavglobal.com/commercial-uav- manufacturers/
  15. 15. 15 Decision Support References • http://marketersmedia.com/marketreportsonline-global-drones-market-2016-trends- opportunities-growth-drivers-competitive-landscape-2020-forecast/106805 • www.faa.gov/uas/ • http://www.aia-aerospace.org/assets/AIA_UAS_Report_small.pdf • http://www.lucintel.com/lucintelbrief/uavmarketopportunity.pdf
  16. 16. 16 Thank You
  • jinbyukhwang1

    Jun. 29, 2016
  • IehudaMaltz

    Jun. 28, 2016
  • FedorEster

    May. 30, 2016

Drones are at the forefront of revolutionizing market across various application areas. The current consumer base of non-military drone is around 1 million and market size estimated to be 9 Billion USD & 12 Billion USD in 2015 respectively for Military & Non-Military Drones. There are 3 categories of model- Entry Level Hobbyist priced at $300-$500 per kit, next level devices from around $750 per kit, Enterprise models costing from $10000 and up..... This presentation is a result of personal market research project and intended to be used as a reference to derive useful insights. All the facts have been taken from trusted business intelligence sources mentioned at the 'Decision Support References' page at the last. Please feel free to send in your queries at partha2ch@gmail.com CONTENTS- Executive Summary…………………………………………….3 Application Areas………………………………………………..4 Executive Summary—Market Measurements……………....5-6 Key Trends Shaping Drone Market……………………………7 Top 3 Growth Drivers……………………………………………8 Top 3 Challenges……………………………………………10-12 Market Size and Forecast……………………………………..13 Decision Support References……………………………...14-15

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