FAA May Be Off Target With Forecast For Threefold Growth In Commercial Drones

There’s some good information in the FAA’s new five-year Unmanned Aircraft Systems (UAS) forecast, but there are reasons to doubt the accuracy of the agency’s projections in two areas that have captured attention: the claims that there will be roughly threefold growth in the numbers of commercial drones and UAS-certified pilots. Here’s the good, the bad, and the ugly in the report.

The Good

There is some good analysis in this report. For example, it seems the FAA finally gets that drones have a wide variety of price points and the bulk of commercial activity has been driven by low-cost consumer-grade aircraft:

“Currently, the consumer grade dominates the non-model sector with a market share approaching 95 percent. However, as the sector matures and the industry begins to consolidate, the share of consumer grade non-model aircraft is likely to decline but will still be dominant. By 2023, FAA projects this sub-sector will have around 85 per-cent share of the overall non-model sUAS sector.”

This insight is mostly consistent with independent surveys and reports like this one, which finds more than 91% said they bought drones costing over $2,000 for professional purposes—either governmental, academic, or business.

The other good thing in this report is the FAA’s admission that the historical commercial drone registrations outpaced their own predictions by 80%.  Previously, they predicted a healthy growth rate of more than 40%—but they underestimated it.

“Last year, we forecasted that the non-model sector would have around 229,400 sUAS in 2019, a growth rate exceeding 44 percent from the year before (2018). Actual data far exceeds that trend with over 277,000 aircraft already registered by the end of 2018. Our forecast of non-model sUAS last year thus fell short by almost 80 percent for 2018 (or 277,000 actual aircraft vs 158,900 that we projected last year).”

The Bad

A closer look at the report reveals a few oversights and curious assumptions for their forecasts. Some of the key metrics and growth trajectories came from a survey the FAA conducted in June-July of 2018 about commercial activities performed in 2017 under Part 107. The survey sent to 89,000 individuals was intended to get a snapshot of non-model/commercial mission characteristics, including locations, aircraft types used, and altitudes flown. But the response rate to the survey—which was complex and time-consuming—was low (approximately 8 percent).

Still, the report projects the U.S. commercial drone fleet (small non-model UAS) to nearly triple from 277,386 in 2018 to 835,211 in 2023, an average annual growth rate of almost 25 percent. However, the main oversight is that most people don’t deregister their aircraft.  They may if they register a new one, but if they stop using one they are not going into the Registry to delete it. This keeps the current number inflated.

Another noticeable problem is the survey results are inconsistent with internal FAA data. And to be fair, the FAA admits there are big variations between the survey results and their aircraft registry. For instance, almost a third of survey respondents use one small drone; their aircraft registry (i.e., the Registry) indicates 55 percent use one small drone. The survey indicates that, for those operating multiple small drones, 54 percent operate 2-9, but the registry claims just on third fly multiple drones.

Another issue is the survey found the largest commercial use for drones was in R&D and in training/education missions (21%). But year over year, other industry benchmark surveys find the number one use for commercial drones is aerial photography and video. This disconnect is no surprise given how the FAA worded their survey questions. In this instance, the question asked for the number of missions performed on average per aircraft in each of activity they listed, not about its major intended use. Given most businesses were new to drones in 2017, it makes sense that the FAA found a lot of aircraft flew training missions back then—not actual industrial missions such as mapping and inspections as happens today.

The Ugly

Perhaps the biggest problem with the FAA report is in the Remote Pilot Forecast section. It predicts the number of UAS-certified pilots is “set to experience tremendous growth following the growth trends of the non-model sUAS sector.”  It predicts commercial drone activities may require almost 350,000 remote pilots in five years—a three-fold increase. Many in the press have run with this assumption and taken it to mean that the commercial drone industry is set to triple in the next five years. But a closer look calls this into question and makes that forecast specious.

To start, the FAA does not maintain a database showing the number of remote pilot certificate (RPC) holders who are current.  They only report gross new RPC holders. As reported here, 126,299 individuals have been issued a remote pilot certificate as of March 15, 2019.  But as of the same day, only 7,306 individuals have taken the remote pilot certification recurrent knowledge test, which is required every two years. Given remote pilot certification started in August 2016, that means only 20% of the original pilots have renewed their license to operate commercially.  To be fair, that figure may be higher but not by much since Part 61 pilots with an existing RPC and have met their flight review requirements are considered RPC current.

If the number of certified remote pilots is the benchmark for commercial drone industry growth (because, almost uniformly around the world, regulations demand each drone operation have one pilot), it seems crucial the FAA keep and report a database on current RPC holders in the U.S. That information would enable all to predict with greater certainty the growth of the commercial drone industry.

This article first appeared on Forbes.com
Image: A drone operator demonstrates a DJI Matrice 100 drone at the Applied Drone Technology for Business Conference. Photographer: Paul Faith/Bloomberg © 2019 BLOOMBERG FINANCE LP

New Report Benchmarks Drone Industry and Refutes Hyperbole

We just released the results of our third annual drone industry benchmark survey and it’s a kicker.

The 2018 Drone Market Sector Report examines worldwide drone sales, service providers, business and public agency users, and software services. This independent research, which is sponsored by DJI, DroneDeploy, DroneInsurance.com, and Trimble, finds a growing demand for businesses to use drone-acquired data in their day-to-day operations as well as other fresh insights on major drone industry segments.

Research

Our online market survey garnered over 2,500 respondents representing over 60 industries worldwide. Our analysis yields 10 key insights that summarize the current state of the industry, plus detailed analysis of drone adoption by businesses and enterprises.

Report

The 107-page report presents the results and analyses from each survey question. It’s organized to match our survey, with four sections that correspond to the four major segments of the drone industry:

  1. Drone aircraft and payloads purchased
  2. Service providers that offer drone-based imaging or sensing services for outside hire or sale
  3. Businesses and public agencies with drone programs
  4. Software apps or online services for drone operations and imaging

The report features more than 60 helpful figures and tables and offering insight and analysis on:

  • Who’s buying what types of drones from which makers at what prices and for what uses.
  • How large the drone-based service providers are, and how they position themselves to their target industries.
  • Who the business users of drone-based projects are, and which industries have traction.
  • How much service providers, business users, and public agencies are using flight management, mission planning, and image processing software for drone-based projects.

Findings

Among the more interesting findings are that commercial drone fleet sizes are smaller than most people think. If you believe the hyperbole, there are hundreds of thousands of drones in the airspace at the same time, but the survey finds that the average commercial user has just two drones that are only flying two projects a month and most of those flights consume less than flight three hours.

There are many other insights in the report, but these three are especially worth highlighting:

  • Professional use of drones is growing. We find that almost three-quarters of all drones weighing over 250 grams are purchased for professional purposes—either governmental or business. This is up from last year.
  • DJI continues to dominate the market and has made gains this year in every category from drone aircraft at all price ranges, to add-on payloads, to software. Survey data shows DJI is still the dominant brand for drone aircraft purchases, with a 74% global market share in sales across all price points.
  • Most businesses and public agencies are new to drones, have small programs, and perform their own services. The survey finds that nearly three-quarters of businesses or public agencies have only had a drone program in place for two or fewer years.

How to get it

You can download a complete prospectus or purchase the report here: https://droneanalyst.com/research/research-studies/2018-drone-market-sector-report-purchase

 

Image credit: Skylogic Research

New 2018 Drone Industry Benchmark Survey

We just announced the launch of our third annual Drone Market Sector Research survey, which promises to be our most comprehensive study of drone market trends and usage to date. The online portion of this research seeks to get information about who is buying and using small unmanned aircraft systems—otherwise known as drones. It improves upon the 2017 research by, among other things:

  • Asking more specific questions about flight operations and flight times
  • Investigating the adoption and maturity of enterprise and/or public agency drone programs
  • Diving into how users geo-reference images for maps

Take the brief 10-minute survey here: https://www.surveymonkey.com/r/2018_drone_market

As an incentive for participation in the survey, there will be an opportunity to:

  • Receive a free summary report of the research results, a $95 value
  • Enter to win a free DJI Spark mini-drone package (a $425 value) or one of two $100 VISA gift cards.

What’s new?

This year’s research is designed to uncover fresh insights on which drone industry sectors are thriving (and which aren’t) and how businesses are using drone-acquired data in their day-to-day operations. Skylogic Research hopes the survey results will fill a gap in knowledge and understanding of the commercial drone industry around:

  • Actual drone and drone data usage (most reports forecast use but don’t survey actual users)
  • How and why operators and users are deploying drones now and how/why they plan to grow their use in the future
  • Baseline statistics for market share among the brands as well as information about the size of service providers, enterprises, and businesses that have drone programs

The online portion of this year’s research seeks to get information about who is buying and using small unmanned aircraft systems. This independent study is being supported by DJI, DroneDeploy, DroneInsurance.com, and Trimble.

The survey will explore:

  • Who’s buying what types of drones from which makers at which prices and for what uses?
  • How large are drone-based service providers, and how and where are they positioning themselves to whom and which target industries?
  • What most concerns businesses that perform drone-based projects and why?
  • How much are service providers, business buyers, and public agencies using flight management and data analytic software for image-based projects?

Our previous studies have found that more consumer drones are being used for professional use than ever before, the U.S. market is flooded with service providers and remote pilots but very few make enough money to sustain a full-time venture, and film / photo / video dominates both the hobby and professional uses of drones. This year’s study will continue to challenge these insights and explore further the sustainability of drone service providers.

Who should take the survey?

  • Individuals or organizations who have purchased a drone in the past 12 months for any reason
  • Commercial drone service providers
  • Businesses, enterprises, and public agencies that perform drone-based operations

Why this study?

We believe the consumer and commercial drone market needs this annual benchmark study. There is a lack of objective information on the drone industry. We find an absence of credible market-based research and little understanding of the difference between large industry forecasts and actual buyer adoption rates. This study will clarify much of that.

When complete, the research study will provide a complete view of topics like:

  • Critical industry drivers
  • Vendor and service provider market share
  • Business and public agency adoption trends and issues

The survey will be open for four weeks, and results will be available in September.

 

Image: Shutterstock and Skylogic Research

New Survey: Who’s Buying Drones, Using Drone Software, and Why?

We just announced the start of our 2017 Drone Market Sector Research, which promises to be the most comprehensive study of drone market trends and usage to date. The online portion of this research seeks to get your opinions about buying and using small unmanned aircraft systems—otherwise known as drones This independent research is being underwritten by Airware and DroneDeploy and is designed to uncover fresh insights on which drone industry sectors are thriving (and which aren’t) and how businesses are using drone-acquired data in their day-to-day operations.

Why are we doing this?

Because we believe the consumer and commercial drone market needs it. Our observations:

  • We see a lack of objective information on the drone industry.
  • We find there’s an absence of credible market-based research.
  • We see little understanding of the difference between large industry forecasts and actual buyer adoption rates.

The survey will explore:

  • Who’s buying what types of drones from which makers at which prices and for what use?
  • How large are drone-based service providers and how and where are they positioning themselves to whom and which target industries?
  • What concerns business buyers of drone-based projects most and why?
  • How much are service providers and business buyers using flight management and data analytic software for image-based projects?

Who should take the survey?

  • Individuals or businesses who have purchased a drone in the past 12 months for any reason
  • Commercial drone service providers
  • Businesses that use drones or drone services as part of their company’s internal work or projects

Take the brief 7-8-minute survey here: https://www.surveymonkey.com/r/2017_drone_market

As an incentive for your participation in the survey, there will be an opportunity to:

  • Receive a free summary report of the research results, a $95 value
  • Enter to win a free DJI Spark Mini Drone (a $400 value) or one of two $100 VISA gift cards.

When complete, the research study will provide a complete view of topics like:

  • Critical industry drivers
  • Vendor and service provider market share
  • Business adoption trends and issues
  • Market size for all drones and growth projections by segment

The survey will be in market for four weeks, and results will be available in September.

As always, I’m interested in hearing from you.  If have questions or comments, feel free comment below or email me at colin@droneanalyst.com.

 

Image: Shutterstock and Skylogic Research

New Commercial Drones Report: Current State of the U.S. Industry

UPDATE: September, 2016. This report has been updated to include the latest market trend and FAA Part 107 rules

I just released a new research report.  It details the state of the commercial drone industry in the U.S. as of the end of September 2015.  It looks at recent innovations, business applications, key ecosystem companies, and market forecasts. It analyzes the business impact and market opportunities that proposed Federal Aviation Authority (FAA) rules have on unmanned aircraft systems (UAS) manufacturers, distributors, service providers, and investors.  The 34 page report is a great primer for those who want to take advantage of the coming boom in this potentially lucrative industry.  It provides fresh information for industry veterans, entrepreneurs and investors, career changers/advancers, and corporate personnel in all industries. The full text of the report contains the most salient industry statistics illustrated by 12 figures and four tables.

Included in the report are the following:

  • A primer on commercial drones that discusses common terminology and the distinctive nature of commercial drones as aircraft systems and Internet of Things devices.
  • An outline of the growing number of commercial applications for drones, with categorization into major market segments for easier consumption and further analysis. We discuss the growing interest in commercial drones, what forecasters say about future demand, and what investors are banking on.
  • An overview of the industry’s flourishing ecosystem of businesses that support commercial drone activity. We present a few of the most prominent firms and companies that provide legal services, insurance, flight readiness applications, and training.
  • A detailed discussion of the fluid state of FAA restrictions on commercial UAS operations in the U.S – including the FAA’s proposed rules for small UAS. We also discuss the growing complexity of state and local issues, the current state of private sentiment and legal concerns, and the impact of proposed FAA rules. It shows that some markets are winners, but some are bigger winners than others. We report on the important details and determine the success factors in each market.
  • Statistics on commercial drone use. We compare the number of drone operators by country, the manufacturers who have the most aircraft in U.S. commercial operations, and which market segments are shaping up to be the biggest.

In the final section of the report you’ll get a glimpse of the future.  I present a list of several firms in Silicon Valley and across the U.S. that either have, are incubating, or are working on innovations that will solve the complex problems of UAS integration into the national airspace.

The report is available for purchase here.

If you have questions about what’s in the report or would like to comment on it after reading it write me colin@droneanalyst.com.

Image credit: Shutterstock