The unmanned aerial vehicle (UAV) market is growing, projected to reach $8.4 billion by 2018. UAVs are predominantly used for military and security purposes by countries like the US, UK, and Israel. While UAV use is concentrated in a few countries currently, the market is becoming more international. The US accounts for over half of research spending and procurement but this share is expected to decline as more countries develop and use UAVs for defense. The UAV market is led by high altitude vehicles but medium and low altitude types are growing segments. Increased civilian and commercial use of UAVs is also expected in the future.

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published: Nov’ 2013
Unmanned Aerial
Vehicle Market

2. Unmanned Aerial Vehicle Market
Market Overview
UAS (Unmanned Aircraft Systems)
is an emerging sector of the aero-
space industry with great opportu-
nity and market demand that can
be leveraged to high profitability
in the near future.UAS market
includes all unmanned vehicles
such as Unmanned Aerial Vehicles
(UAVs), blimps and zeppelins.
Unmanned Aerial Vehicles (UAVs)
are the most predominant seg-
ment of the UAS market. Pres-
ently, most of the expenditures on
UAVs are dedicated for Research
and Development activities.
The global UAV Market is witness-
ing a gradual but constant growth
during past few years and is expected to
reach US$ 7.1 Billion by the end of the year
2013 rising from US$ 4.5 Billion in 2009.
It is projected that NATO nations (especially
the U.S.) will reduce their investment in
defense and security UAVs while the non-
NATO world will move into the military and
police UAVs in a relatively big way.
Thus, the revenue for Unmanned Aerial
Vehicle is expected to experience a CAGR
of 3.3% during the period of 2013- 2018
from US$ 7.1 Billion to reach US$ 8.4
Billion in 2018. Further, General Atomics
Aeronautical Systems is the leader in UAV
market with around 19% of the market
share.
The UAV market is evolving and manufac-
turers are fairly concentrated in the US; and
Israel is another major location. It is now
becoming an increasingly international
market, as UAVs have also proved their
value in Iraq and Afghanistan.
Overview
7.1
6.6
5.9
5.3
4.5
2009
2010
2011
2012
2013
Figure 1: Unmanned Aerial Vehicle Market
(Billion US$), 2009-2013
Source: RNCOS
7
2013e 2018f
8
CAGR
3.3%
Figure 2: Unmanned Aerial Vehicle Market
(Billion US$), 2013 & 2018
Source: RNCOS

3. Unmanned Aerial Vehicle Market
It is further being sought
by a growing number of
militaries worldwide.US is
expected to account for
65% of the worldwide
RDT&E spending on UAV
technology over the next
decade, and 51% of the
procurement. In addition,
at present, 32 nations
are developing over 250
models of UAS and 41
countries are operating 80
types, mainly for recon-
naissance activities.
Apart from US, the coun-
tries which have shown major interest
in UAVs are Brazil and Argentina in Latin
America; UK, France and Germany in Eu-
rope; South Africa in Africa; Israel and
the UAE in the Middle East and India,
Australia, Japan and South Korea in the
Asia-Pacific. Russia too has an in-depth
UAV programme, but their success levels
have been limited.
There has been extensive usage of tacti-
cal UAVs (TUAVs) and relatively fewer high
altitude long endurance UAVs (HALE) and
medium altitude long endurance (MALE)
systems and further Small UAVs (SUAVs)
have also seen strong growth.
In addition to the military market, the mar-
ket for civilian and commercial unmanned
air vehicles is also growing. Civilian usage
of UAVs is majorly present in Australia,
France, South Africa, Sweden and the US.
North America
Asia-Pacific
Europe
Middle East
Africa
Latin America
71%
12%9%
1%
5%
2%
Figure 3: Unmanned Aerial Vehicle Market by region (%), 2012
Source: Eurosmart
North America
Asia-Pacific
Europe
Middle East
Africa
Latin America
66%
5%
15%
8%
3%
3%
Figure 4: Unmanned Aerial Vehicle Market
by region (%), 2017
Source: Eurosmart

4. Unmanned Aerial Vehicle Market
Also, the High altitude unmanned Aerial
Vehicles are expected to rule the market with
around 62% by 2017 followed by the Me-
dium Altitude types with around 20% share
and low altitude vehicles with about 14%.
With FAA regulation until 2015, the civilian
UAV market is growing at a slower rate when
compared to military and security applica-
tions although is expected to gain demand
in future. The USA and EU are looking at
policies by which they can allow the usage of
UAV’s in the national airspaces.
Further, High Altitude Unmanned Aerial
Vehicle lead the market followed by medium
altitude vehicles and low altitude types and
a small portion of the pie is also occupied by
the stratospheric unmanned vehicles.
Source: RNCOS
High Altitude
Medium Altitude
Low Altitude
Stratrospheric
Figure-5: Unmanned Aerial Vehicle Market by Type (%), 2017
62%
4%
14% 20%

5. Unmanned Aerial Vehicle Market
UAVs are expected to have an extended presence although at a slower pace and reach impres-
sive heights; the predictions on the show floor push the envelope even more as the market is
anticipated to grow at a CAGR of over 3% during 2013-2018.
Similarly, SPUAV (Solar Powered Unmanned Aerial Vehicles) will be one of the major technologi-
cal advances to be seen in the near future. In future, UAVs may be capable of reaching heights
that are over double or triple of what the present can reach and stay in the air for months at a
time.
Further, UAVs are also trending towards “Tiny UAVs” that can be flown through open windows
are in the works. These miniscule aircraft would stay airborne in times measured in seconds or
minutes while giving valuable information to soldiers on the ground without giving away their
position like a thrown ground vehicle might.
In addition to new technical capabilities, the potential of UAVs is also trending towards Ad-
vanced Automated systems. Rather than having several personnel monitoring a UAV, in the
future it is expected that one person can monitor many different UAVs at once. For instance,
The Hummingbird is the step towards automation, with the ability to fly to land without any
assistance with high accuracy and also perform a number of similarly complex feats without
human guidance.
Thus, UAVs with various degrees of autonomy are already being used and the potential for the
new technology makes it evident that the unmanned aerial vehicle have a positive future.
Future Outlook

6. Unmanned Aerial Vehicle Market
• Light weight Sensors emerge as an Opportunity Area
There is an increasing deployment of unmanned aerial vehicles (UAVs), to allow new air
borne payloads to be tested rapidly and effectively.
For instance, research team at the Georgia Tech Research Institute (GTRI) is developing an
airborne testing capability for sensors. Lightweight sensors allow the use of lighter, smaller
UAVs.
• Potentially Vast Market for Civil UAVs
According to the European Commission, there are more than 400 projects across 20 Euro
pean countries to develop civil unmanned aerial vehicles (UAV) ranging from some weigh
ing just a few grammes to others the size of an Airbus A320 jet.
• Defence Contractors Form Partnerships with Smaller Companies
For instance, Smaller companies in U.S are striking up partnerships with major defense con
tractors, as they await rules from the FAA on integrating UAS’s into the U.S. airspace.
• Growth in Unmanned Combat Aerial Vehicles (UCAV)
Russia joined China and European firms in developing unmanned combat air vehicle. These
are considered to be the replacements for current light bombers (or fighters operating as
light bombers) and combat reconnaissance aircraft.
Opportunities
Opportunities & Challenges

7. Unmanned Aerial Vehicle Market
• Operating Costs Deter Countries from Buying UAVs
The costs of operating a UAV is more than double the costs of operating a manned air
craft. This is because UAVs require a significant amount of logistical support and special
ized operator and maintenance training.
• Prone to Operational Errors
Operating one UAV requires a crew of up to 20 support personnel. Moreover, these tasks,
which require sustained attention from the operator can become target repetitious and
dull over time and can lead to degraded performance and operational errors.
• Bandwidth Limitation Raising Concern
With the increased autonomy, bandwidth required to support these capabilities limit opera
tional flexibility because of the need to choose between large numbers of relatively static
surveillance missions or a few very flexible multi-mission operations.
• Integration into Controlled Airspace
There is a lack of clear regulations to integrate UAVs into the airspace and make them
coexist with manned aircraft and thus is posing a serious threat.
• Fuel and Battery Requirements
• Air Regulations Affect both Military and Civil UAVs
• Civil UAVs Raise Air Safety Concerns
Challenges

8. Unmanned Aerial Vehicle Market
Recent News
• April 2013, South Korea has planned to resume a once-aborted program to develop mid-altitude
unmanned aerial vehicles (MUAV) to bolster its monitoring capabilities of North Korea’s missile and
nuclear programs.
• May 2013, The Indian government is set to move unmanned aerial vehicles (UAVs) meant for
anti-Naxalite operations to Bhilai in Chhattisgarh, even as the Indian Air Force (IAF) is ramping up its
helicopter fleet in central India.
• June 2013, Three of Europe’s biggest aerospace companies: EADS Cassidian, Dassault Aviation and
Finmeccanica Alenia Aermacchi, having a common view on the current situation in Europe regard-
ing MALE drones, call for the launch of a European MALE program.
• September 2013, Iran unveiled the latest unmanned aerial vehicle (UAV) during the ceremonies
of the Sacred Defense week. The UAV`s domestically made bombs and missiles, which have already
been fully installed and tested. The capability to fly at higher altitudes for a longer range distin-
guishes Hamaseh from other Iranian-made drones.
• September 2013, The Border Security Force (BSF) will soon deploy unmanned aerial vehicles (UAV)
along the border with Pakistan to maintain heightened vigil. A standard operating procedure is be-
ing drafted with the Indian Air Force (IAF) to finalize the modalities of using the UAVs.
• October 2013, Army’s Northern Command has issued a global tender for procuring 49 latest min-
iature unmanned aerial vehicles (UAVs) for gathering intelligence and carry out reconnaissance of
areas along Line of Control (LoC) with Pakistan and Sino-India border.
Recent News

9. Unmanned Aerial Vehicle Market
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