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

1. Drones Market
Research By Partha Chowdhury
partha2ch@gmail.com
March 2016

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
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
Application Areas
AERIAL PHOTOGRAPHY & VIDEO MAPPING
SURVEYING
SEARCH AND RESCUE
INSPECTIONS
UNMANNED CARGO
SYSTEM
DHL “Paketcopter” for parcel delivery

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
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
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
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
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
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
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
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
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
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
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
Thank You