This document summarizes Colin Snow's presentation on drone market forecasts given at the Small Unmanned Systems Business Expo in April 2016. It notes that there is a wide diversity of drone market forecasts ranging from $2 billion to $92 billion. Many forecasts hype growth in precision agriculture and public safety, though the data on actual commercial drone use is limited and unreliable. The document provides data from Skylogic Research's survey of 783 drone buyers, finding that over half spend between $1,000-$4,000 and DJI accounts for about 50% of the North American market, not 70% as claimed. Most drones over $2,000 are for professional rather than recreational use.

1. 1|Copyright ©2016 Skylogic Research, LLC
MAKING SENSE OF
DRONE MARKET
FORECASTS: 2016
AND BEYOND
Colin Snow
For Small
Unmanned Systems
Business Expo
April 27, 2016

2. 2|Copyright ©2016 Skylogic Research, LLC
“It’s tough to make predictions, especially about the future.”
– attributed to Yogi Berra

3. 3|Copyright ©2016 Skylogic Research, LLC

4. 4|Copyright ©2016 Skylogic Research, LLC
Forecasts: diversity,
hype, rumor, and
wonk
$2B - $92B

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Diversity
We are currently tracking
31 different forecasts!
Most reports sell between
$2,000 and $6,000

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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.”

7. 7|Copyright ©2016 Skylogic Research, LLC
Rumor Q. What was the impact of FAA’s consumer drone
registration on holiday sales?
A. NPD says some slippage at first, but in the end
sales were up YoY

8. 8|Copyright ©2016 Skylogic Research, LLC
Wonk “In the period from August 2015 to December 2015, only
37.8 percent of exemptions listed a single intended
operation, compared to 57.3 percent in the period from
September 2014 to July 2015.”
Source: “Analysis of U.S. Drone Exemptions2014-2015.” Center for the Study of the Drone at Bard College. March 16, 2016.

9. 9|Copyright ©2016 Skylogic Research, LLC
Wonk Because of 3rd party “copy-and-paste” FAA Section 333
applications (over 1,100 by one firm alone) the data is
now an unreliable source of actual UAS commercial
operations activity or actual UAS commercial aircraft in
use.
The
“Howdy Doody”
Effect

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.”
The
“Howdy Doody”
Effect
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.
Source: Bard
Image: DJI

11. 11|Copyright ©2016 Skylogic Research, LLC
Wonk Q. Which is the best predictor of commercial use?
A. Neither!
Source: Bard

12. 12|Copyright ©2016 Skylogic Research, LLC
Our latest research
Large sample size means the
statistics are very reliable
Confidence level: 95%
Valid for a population of 5
million buyers
783qualifiedrespondents

13. 13|Copyright ©2016 Skylogic Research, LLC
Sample data

14. 14|Copyright ©2016 Skylogic Research, LLC
Buyers Q. What is the age of drone buyers?
0.1%
9.3%
45.6% 45.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
15 or under 16 - 31
(Millenials)
32 - 51 (Gen X) 52 + (Baby
Boomers)
n = 783
Source: Skylogic Research
YES

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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

16. 16|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.So there is a
substantial population
willing to buy other
brands at various price
points.
insight
SEVEN

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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:

18. 18|Copyright ©2016 Skylogic Research, LLC
Intended use for
drones costing over
$2,000
FAA Definition of UAS
Operations
1. Public
Includes public entities such as
federal and local governments,
police departments,
universities, etc.
2. Civil
Includes commercial and
private industry operators
3. Recreation / Sport
Any person operating a ‘model-
aircraft’ UAS for recreation or
sport or hobby falls into this
category
75%
15%
10%
Civil / Commercial
Recreational / Hobby
Public / Governmental
n = 235
Source: Skylogic Research
Most drones (85%)
costing more than
$2,000 are purchased
for professional use.
Key insight
FOUR

19. 19|Copyright ©2016 Skylogic Research, LLC
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20. 20|Copyright ©2016 Skylogic Research, LLC
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