{"id":1219,"date":"2014-09-25T09:21:02","date_gmt":"2014-09-25T16:21:02","guid":{"rendered":"http:\/\/droneanalyst.com\/?p=1219"},"modified":"2017-01-04T10:26:33","modified_gmt":"2017-01-04T18:26:33","slug":"commercial-uas-market-opportunities","status":"publish","type":"post","link":"https:\/\/droneanalyst.com\/2014\/09\/25\/commercial-uas-market-opportunities\/'","title":{"rendered":"Commercial UAS Market Opportunities: Do defense avionics and electronics suppliers have a head start?"},"content":{"rendered":"

This post also appears in The Market<\/a> section of sUAS News.<\/p>\n

As the Federal Aviation Administration prepares new guidelines for the use of unmanned aerial systems (UAS) in the U.S. national airspace, startups and aeronautic mainstays are chomping at the bit to start selling drones for commercial ventures, from filming to crop scouting to inspecting oil pipelines.\u00a0 Some market forecasts like this one<\/a> from Markets and Markets and this one<\/a> from Business Insider expect the size of the commercial market for sUAS to grow significantly over the next decade. I believe they are right, but what is up for grabs is, Who will get the lion\u2019s share of the market?\u00a0 Will it be the startups like Airware<\/a> and PrecisionHawk <\/a>or the defense suppliers like Lockheed-Martin<\/a> Procerus Technologies and AeroVironment<\/a>?<\/p>\n

I recently came across this this article<\/a> in Military Embedded Systems and was struck by some of the comments.\u00a0 The article starts with this assertion:<\/p>\n

\u201cMost analysts expect the commercial market for unmanned aircraft to eventually dwarf that of the military market. Unmanned aircraft systems have changed the face of modern warfare and created a huge opportunity for electronics suppliers that provide systems for the UAS payloads, ground control stations, and flight controls.\u201d<\/p><\/blockquote>\n

It goes on to quote Ron Stearns, Research Director at G2 Solutions:<\/p>\n

\u201cCompanies who will have the biggest head start in [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][the commercial UAS] market will be defense avionics and electronics suppliers who have been there and done that with this technology,\u201d he continues. \u201cHowever, it is a very different operating space for them, akin to a purely commercial electronics company trying to sell in the military procurement realm.\u201d<\/p><\/blockquote>\n

What struck me first is the assertion that the commercial market for UAS will dwarf that of the military. Neither the Markets and Markets or Business Insider forecasts show that.\u00a0 Business Insider is perhaps the most rational, as they predict that 12% of an estimated $98 billion in cumulative global spending on aerial drones over the next decade will be for commercial purposes.<\/p>\n

Second, there is little evidence that those same suppliers that benefited from military drones will benefit from the eventual commercial applications of this technology.\u00a0 It is not \u2013 as the Military Embedded Systems article suggests – an R&D problem.\u00a0 I believe the vast differences in the ways these firms go to market is the problem that will, in fact, \u201cthrow a wrench in that transition.\u201d<\/p>\n

As background, I suggest taking a look at a piece I wrote back in March 2014; The Business of Drones: A Tale of Two Cities<\/a> lays out the issues and the advantages of each camp. Since that time, I have attended the Precision Aerial Ag show<\/a> and Ohio UAS Conference<\/a> and witnessed the advancement of off-the-shelf open source technology and the go-to-market practices of commercial UAS aircraft produced independent of government contracts or sub-contracts.<\/p>\n

Third, I see no evidence that supports the claim that defense avionics and electronic suppliers have the biggest head start. In fact I see just the opposite.\u00a0 Take, for example, the software platform that runs small UAS for commercial use. You would think that when NASA solicited collaboration from outside organizations for its UAS Traffic Management (UTM) research and development<\/a> to enable sUAS operations at lower altitudes, Lockheed-Martin would have jumped at that opportunity.\u00a0 After all, they are an existing NASA contractor, and their Kestrel 3.0 autopilot avionics technologies incorporates data from a suite of sensors and GPS to create an accurate estimate of the vehicle’s location and orientation.\u00a0 They also make the Stalker UAS<\/a>, which is the same size and weight class as many enterprise level sUAS like the PrecisionHawk Lancaster.\u00a0 But they didn\u2019t.\u00a0 Instead, San Francisco startup Airware answered the call.\u00a0 You can see that announcement here<\/a>.<\/p>\n

NASA plans to test UTM capabilities to safely enable low-altitude operations and operational requirements for wind\/weather integration, airspace design\/geo-fencing, sense-and-avoid\/separation management, demand\/capacity imbalance management, contingency management, and enabling requirements such as communications, navigation, and surveillance. The outcome of this research is bound to impact the future market for sUAS technology in the commercial markets, and collaborating parties will receive valuable performance data about their assets and ability to operate in the mixed airspace. In this regard, I think Airware has the head start.<\/p>\n

There are other examples of where non-military vendors \u2013 especially those in Silicon Valley – have surpassed their military counterparts. Look for those in future \u201cThe Market\u201d articles. In the meantime, feel free to write me at colin@droneanalyst.com<\/a> and tell me what you think\u2014will startups or defense contractors get the lion\u2019s share of the commercial sUAS market? Or another party?<\/p>\n

 [\/fusion_builder_column][\/fusion_builder_row][\/fusion_builder_container]<\/p>\n","protected":false},"excerpt":{"rendered":"

This post also appears in The Market section of sUAS News. As the Federal Aviation Administration prepares new guidelines for the use of unmanned aerial systems (UAS) in the U.S. national airspace, startups and aeronautic mainstays are chomping at the bit to start selling drones for commercial ventures, from filming to crop scouting to inspecting … Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":1221,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29,7,6],"tags":[],"yoast_head":"\nCommercial UAS opportunities for defense suppliers<\/title>\n<meta name=\"description\" content=\"Commercial UAS Market Opportunities: Do defense avionics and electronics suppliers have a head start?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/droneanalyst.com\/2014\/09\/25\/commercial-uas-market-opportunities\/'\" \/>\n<meta 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