GIS: The Biggest Little Drone Market in the World

Last week I had the pleasure of participating in a two-day symposium on unmanned aircraft systems (UAS) hosted by the Northern California American Society for Photogrammetry and Remote Sensing (ASPRS).  The event was held in Reno, Nevada, (otherwise known as “The Biggest Little City in the World”), and its purpose was to assemble UAS experts and enthusiasts to share information, showcase new technologies, and demonstrate systems in action – systems that support geographic information systems (GIS).  Presentations covered a wide range of topics, including everything from vehicles, to software, to data collection, to workflow, cameras, and sensors. You can find my presentation here.

By all measures, this event was a success. With more than 500 attendees, the symposium included presentations on a wide range of topics including vehicles, to software, to data collection, to workflow, to cameras and sensors and an afternoon of UAS demos.  But what struck me most about the symposium was not just the participants’ level of sophistication and knowledge (it was very high), but also the suitability of drones for the mapping and surveying market. In this article, I’ll explain why I think this market will be the second biggest commercial drone market (behind aerial photography and cinema and ahead of precision agriculture) by telling you three things I learned about how GIS professionals see and use drones.

Drones are a perfect fit for GIS – A geographic information system (GIS) lets you visualize, question, analyze, and interpret data to understand relationships, patterns, and trends. GIS benefits organizations of all sizes and in almost every industry. So, GIS professionals, like those who are members of ASPRS, are no strangers to aerial imaging.  They know cameras and aircraft – and surprisingly a lot about drones. When I asked the audience by show of hands how many are familiar with drone technology and have remotely piloted a drone, more than half said they were familiar and had been a drone pilot. This stands in sharp contrast to the audience of the large agricultural drone show I attended over the summer where most attendees had never flown a drone and were unfamiliar with the technology – let alone cameras.

As a profession, most of this audience does photogrammetry.  They are image producers.  As a profession, farmers are consumers of images. For the unschooled, photogrammetry is the science of making measurements from photographs. The inputs are georeferenced photographs.  Up to now these have been taken from manned aircraft or satellites. The output is typically a map, drawing, measurement, or a 3D model of some real-world object or scene. Since photogrammetry is used in fields like topographic mapping, architecture, engineering, manufacturing, quality control, and geology, the accuracy of images matters to these professionals.  What matters to their customers is whether the output is timely, rich, localized, and problem-specific.

So, what better way is there to get all that done than from a drone?  None.  Low altitude small drones provide an advantage over incumbent aerial technology for GIS work.  The images from these drone sensors are more resolute, can be captured more frequently, and cost less to produce.  GIS professionals are willing to spend a lot of money on drone systems — they already spend about $40K for a complete ground-based GPS rover system and more than $100K for 3D laser scanners.  So, the idea of spending up to $100K for a turnkey unmanned aircraft system is not out of line — and drone vendors know this.  That’s why those that exhibited at this event showcased their high-end turnkey systems.

GIS professionals need good drone software – There is a growing interest in and awareness of the economic and strategic value of GIS for the Global 2000, as witnessed by the recent integration partnership between Esri (world’s largest GIS software vendor) and SAP (world’s largest enterprise application vendor). But the race to the top is for the software front end to that enterprise piece. The part that mappers and surveyors use on a day-to-day basis—including  software like work management, flight controls, mission planning, aerial capture, post-processing, and mapping, and modeling.

There were more than 25 software vendors at this show – each with a bit of news.  Some of the most interesting came from DroneDeploy and Google.  DroneDeploy announced the first drone software capable of creating orthorectified maps in real time. Users have typically had to wait for four to six hours for maps to be created from drone imagery, but now they can get real-time aerial maps. This will save operators hours every time they fly their drones, and enable better decisions, as data can now be verified during a flight instead of hours or even days later as is the case with existing systems. DroneDeploy is able to achieve this real-time stitching because the drones its product manages are all internet-enabled and use cloud infrastructure for the processing.

The other interesting news from the event came from Google.  Its soon-to-be-released Earth Engine product can now mix the world’s satellite imagery with UAS images — along with trillions of scientific measurements dating back over 40 years — and make it available online with tools for scientists, independent researchers, and nations. All of whom can mine this massive warehouse of data to detect changes, map trends, and quantify differences on the Earth’s surface. Google has already worked with Skycatch and opened up the engine to other partners, so expect to hear more as they go to full-scale launch.

LiDAR drones are here

Mapping and surveying professionals love LiDAR.  They love it because it allows them to capture minute details that photos can’t — and with those details create precise digital representation of objects, buildings, and the ground. LiDAR is based on the same concept as RADAR, but it uses laser light instead of radio waves. By sending out laser beams in all directions, collecting the reflected energy, and performing some nifty high-speed computer processing, a scanner can create a real-time, virtual map of the surrounding area.  These representations have many uses.

But most LiDAR units are heavy and – up to now – had to be mounted on trucks or manned aircraft.  So over the past couple of years manufacturers like Riegl and Velodyne have reduced the size and weight of their units such that that it’s now possible to mount them on large multicopters.  Additionally, these same vendors sell or partner to sell their own dedicated drones, thereby ‘vertically integrating’ (no pun intended) their scanner offerings.  By coupling novel drone-mounted LiDAR systems with vision cameras, advanced computer processing, and GPS, it has become possible to create a remotely piloted flying LiDAR scanner. These vendors were at the show as was Phoenix Aerial Systems and XactSense, both of which have LiDAR drones.

What’s next?

What will be the next innovation for this market?  Well, maps of navigable drone highways in the sky, for one.  These would be aviation maps that would help pilots of manned aircraft know where not to fly. This BHAG is already being taken on by SkyWard, which just introduced the Urban SkyWays Project and the first end-to-end demonstration of a commercial drone network operated with full regulatory compliance. After that? Who knows.  One thing is certain: I expect to see the vendors that attended this symposium continue to innovate in big ways.  Stay tuned.  In the meantime, feel free to write me at colin@droneanalyst.com and tell me what you think about the market opportunities.

This post also appears in sUAS News ‘The Market‘.

Drone Delivery: By The Numbers

What do medicine, batteries, and forgotten anniversary gifts have in common?  They are the most likely items consumers will want to be delivered by drone once that service is available.  At least, that’s the verdict from the consumers I surveyed in August and September of this year. In my post Drone Delivery: How Much Would You Pay?, I ran a poll with three simple questions:

  1. What’s the maximum amount you would be willing to pay for a package delivered by drone?
  2. Which of ten items would you want delivered in 30 minutes?
  3. Under what circumstance would you need something so quickly that you’d pay top dollar for it?

These are the topline results.  You can see the companion SlideShare presentation with more complete graphs and charts of the data here.

The max you’d pay?  First, I wanted some base data on how much people would pay for drone delivery.  So, I asked if consumers were willing to pay for the service and whether they wanted to pay a flat fee or a percentage of the price of their purchased items.  More than three-quarters of respondents (82%) told us they would be willing to pay (vs. 18% who said they wouldn’t), and the largest majority of those who’d pay (62%) said they would prefer paying a percentage of the item’s purchase price (vs. 18% who said they would rather pay a flat fee).

When we asked those who were willing to pay for the service how much they would be willing to pay, we saw big differences in preference. For instance, as I mentioned, only 18% of respondents said they’d prefer a flat fee, and 80% of those people said they wouldn’t pay more than US $50 for delivery.  That’s not a lot more than express overnight delivery fees. I doubt these consumers will be using fixed charge drone delivery services.

For those respondents who indicated they’d pay a percentage of an item’s price, more than half (51%) said they would pay up to 10% of an item’s purchase price.  Most of the rest (43%) said up to 20%, and only 6% said up to 30%.  It seems that a percentage charge could leave a delivery service with losses if the delivered items aren’t high priced.

Items you’d want delivered?  Second, I was curious to know what items consumers would likely purchase and want delivered by drone. I reviewed online shopping trends to find most popular product categories and top purchase drivers – keeping in mind the items had to fit the following drone delivery requirements:

  • The order must be small enough to fit in the drone’s cargo box
  • The items must weigh less than 5 lbs.

There were clear winners and losers in the list of items consumers would want delivered in 30 minutes or less (see Figure 1).

FIGURE 1 – Which of 10 Items Would You Want Delivered in 30 Minutes?

Drone Deliver Fig 1

 

Respondents could choose as many items as applies.  Nearly three-quarters (72%) would use drone delivery to have a gift delivered.  Over half (57%) chose electronics.  Food and medicine were next highest on the list at 45% and 38%, respectively.  Batteries were the most mentioned item in the ‘other’ category.

Food may not be a good candidate for drone delivery.  Whether from the supermarket, mini-mart, fast food joint, or other restaurant, food is generally very inexpensive per pound.

Circumstances under which you’d pay top delivery dollar? – Third, I wanted to know under what circumstances consumers would need something so quickly that they’d pay top dollar to have it delivered quickly. I looked at the same online shopping trends noted above for the most popular categories and top purchase drivers. Results appear in Figure 2.

FIGURE 2 – Under what circumstance would you need something so quickly that you’d pay top dollar for it?

Drone Deliver Fig 2

 

You can see that respondents picked ‘emergencies’ at 66% and ‘in trouble / need it quick’ at 64% as the most likely circumstances that would trigger the use of a drone delivery service.  An ‘emergency’ is a subjective term that can mean just about anything, including the third most likely circumstance of a last minute anniversary or birthday gift – especially if you are desperate and have forgotten it.

Bottom line – From this small study I see three interesting insights:

  1. For the most part, consumers are willing to use a drone delivery service, but price matters.
  2. Consumers are not willing to pay more than 30% of the item’s value for that delivery – most no more than 20%.
  3. Electronics given as gifts will likely be the most ordered items.
  4. Consumers consider medicine and batteries important and urgent enough for drone delivery.

Here’s a simple example based on the data gathered: A consumer camera is ordered as a last minute gift and needs to be delivered in 30 minutes or less. The best enthusiast compact camera in 2014 is the Sony DSC-RX100M II Cyber-Shot Digital Still Camera. Its shipping weight is 3 pounds. At the date of this post, it lists on Amazon for about US $650. If the drone delivery service charges 20%, then the extra cost will be US $130.  If the drone delivery service charges 30%, then the extra cost would be US $195.  Keep in mind this is an example only.  We do not know how much Amazon Prime Air will charge for this or any other items – nor do we know what items actually qualify for the service.  Regular Amazon Prime users know already that not all items qualify for its two-day delivery service since they ship from contracted suppliers.  However, for comparative purposes today, if you were to order this item for U.S. overnight delivery to the West Coast, the charge would be approximately $34.

I believe drone delivery is best suited to high value, lightweight merchandise, including some items at Walgreens, CVS, or Rite-Aid, and a meaningful portion of the merchandise at many other large retailers. In addition to consumer products delivered to households, drones can provide fast and cost-effective deliveries to remote, hazardous, or hard-to reach areas.  Other applications for drone delivery include:

  • Relief shipments or medicines needed on-site quickly
  • Autonomous logistics within corporate structures or facilities (micro logistics)
  • Transportation network or logistics for last-mile delivery of critical components or raw material
  • Document delivery

As always, feel free to comment or ask questions or email me directly at colin@droneanalyst.com.

Image credit: Shutterstock