Posts tagged "Research"

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

In my last post, Five Biggest Commercial Drone Trends of 2017 and the Challenges Ahead, I used data from our 2017 Drone Market Sector Report to illustrate the major trends of the past year and describe the major challenges ahead for the drone industry. That post looked back, but this one looks forward, offering our specific predictions for 2018, including investments, technology improvements, ecosystem partnerships, and software innovations.

(Listen to this companion Drone Radio Show podcast here for our complete assessment.)

1. Investment and testing will continue in earnest on Unmanned Traffic Management (UTM) and beyond visual line of sight (BVLOS) operations.

With regulations moving at the speed of government and dissenting views on Drone ID, it seems like UTM (air traffic management for low-altitude drones) is an elusive dream. However, there is hope that testing being done on beyond visual line of sight (BVLOS) operations in drone corridors will provide the necessary inputs to integrate drones into the national airspace. Expect news this summer from the vendors and service providers conducting tests at NUAIR in New York as they release results and performance-based navigation standards begin to coalesce.

2. You’ll see more news on improved sensors, hardware integration, networking, and processing.

Already, we’ve seen announcements like this one for new thermal imaging drone payloads. Expect to see further Ethernet / IP sensor integration efforts as more and more remote managers demand immediate access to data from local operations. Expect more news on LiDAR / drone integration like this one from Delair-Tech as more land surveyors and construction professionals demand further time and money savings over traditional methods.

3. Look for more partnerships, software, and innovations coming from the DJI Enterprise ecosystem.

We noted in our 2017 Drone Market Sector Report just how much DJI dominates the industry with its 72% market share. All the major mission-planning and mapping applications—like DroneDeploy, PrecisionHawk’s PrecisionMapper, Skycatch, and dozens more—now run on the DJI SDK. What our report didn’t mention was DJI’s focused efforts to further expand its commercial ecosystem. DJI Enterprise’s AirWorks Conference is but one example, an event whose purpose is showcasing applied drone solutions for the commercial industry’s most challenging obstacles. Expect many innovations from DJI’s partners in the hardware, software, and service sectors.

4. Software will dominate advancements.

Along with the new imaging sensor announcements in 2018, we expect to see imaging software advancements as companies seek to combine RGB, thermal imaging, orthomosaic, and radiometric data.

We also expect to see more aerial imaging and mapping software firms announce artificial intelligence (AI) capabilities. Right now, most of this is cloud-based machine learning (aka deep learning and predictive analytics) where data sets are trained by specialized teams. You may see some edge-based AI announcements for image recognition/machine vision, but be cautious when you do. We think it’s still early in the technology development cycle and AI is at peak hype.

We think the big news for 2018 will be the integration of drone data and workflow into asset management systems. Capabilities include documentation, tracking, and GIS data integration. It may bring a yawn to some but we believe when you can connect the dots and show the effect of drone data capture on the balance sheet, CFOs and CEOs will take notice and drive further enterprise adoption.

Parting thoughts

As I speak to clients, I always like to remind them of two things about the commercial drone market. First, it’s not a drone market, it’s a data and information market. The drone is just a data capture device. Second, drones are aircraf, not consumer products and as such their operations are regulated by aviation authorities.  All technology advancements aside, this is a regulated market, so always expect lumpy, bumpy growth.

We hope you keep those in mind as well and wish you best success in the coming year.

Listen to the companion podcast here http://bit.ly/2CXe6uK.

If you have questions about what’s in the report I mention or would like to comment, write me at colin@droneanalyst.com.

Image credit: Shutterstock and Skylogic Research

Last year at this time, I reflected back on the news and trends of the commercial drone markets of 2016 and wrote about the mixed state of affairs ahead for 2017. Throughout the year, I offered my perspective on how the drone industry was still motivated by hype and how assessing forward momentum required hard data on the performance of the various sectors of the industry. To that end, we did research over the summer that surveyed 2,600 respondents on drone purchases, service providers, business users, and software services. In September, we published the data in 2017 Drone Market Sector Report 2017.

In this post, I’ll use that data to illustrate the major trends of the past year and describe what I think are the major challenges ahead for the drone industry.

Listen to this companion Drone Radio Show podcast here for the complete assessment.

Trend 1—Growth

By all measures, the drone industry in 2017 was marked by significant growth – growth in aircraft sales, software licenses, the number of service businesses entering the market, and the number of industrial businesses setting up commercial operations.

Here are a few statistics:

  • We project U.S. sales in 2017 to be about 3.3M units, which is 36% above 2016 figures. That’s all drones, all sizes. It’s about 1.3M units for the >250gram category.
  • As of October 31st, there were about 837,000 hobbyist users and 107,000 non-hobbyist drones registered with the Federal Aviation Administration (FAA).
  • As of December 1st, there were about 66,000 Part 107 FAA Pilots.

This represents a big change in the commercial market since Part 107 regulations supplanted Section 333 as the means for commercial operations in the U.S. What this and our survey data tells us is the number of service providers currently outpaces demand, and as a result, service prices are coming down significantly.

Trend 2—Consumerization

We said in our report that more consumer drones are being used for commercial work than ever before. For example, our data shows that more than two-thirds (68%) of all drones weighing over 250 grams are purchased for professional purposes—either governmental or business.

Why is this significant? Because the impact of consumer-originated technology on the enterprise is something that can’t be ignored. Enterprises want to take advantage of powerful, yet easy-to-use products (like DJI’s popular consumer models), and put them to work on the job. What this means for operators or businesses is that a shared core technology benefits all users and enables companies to scale the best experiences to everyone. Enterprise customers get the added simplicity and usability of the consumer product that has been built to meet the demands of thousands of customers around the world.  The average individual pilot gets to benefit from the reliability and scalability inherent in the product and demanded by enterprise users.

Trend 3—The DJI effect

Our data shows DJI is the clear market leader in drone aircraft sales and almost every software category. For example, DJI is the dominant brand for drone aircraft purchases, with a 72% global market share across all price points and an even higher share (87%) of the core $1,000–$1,999 price segment. Additionally, in the three categories of software we evaluated, DJI is the market-share leader in two: flight logging and operations, and automated mission planning.

This is significant because by building on top of its existing technology platform, DJI has fast-tracked development and has benefited from economies of scale. By migrating a successful technology stack and feature set upmarket, DJI never has to reinvent the wheel—it just needs to improve upon the original design and save engineering cycles for real innovation.

The upshot is that to stay relevant, all the other major vendors have had to partner with DJI (see Trend 5 Partnerships, below). DJI’s sales success has taken market share from others and has led to layoffs at 3DR, Autel, GoPro, Parrot, and Yuneec. However, fears about data security remain. And this has some speculating about whether DJI can sustain its leadership role in the future.

Trend 4—Investments

According to CB Insights, investments shifted in 2017 from aircraft hardware to software. In 2016, there were 106 deals totaling $542M. Most of these were for hardware. In 2017, VCs focused on software, end-to-end solutions, and counter-drone technology. CB Insights projects the year will end with 110 deals totaling $494M. The most significant investment this past year was 3D Robotics’ $53M Series D round. It saw them pivot from hardware to software services.

Why is this significant?  Because it shows the industry is still maturing. Seed and Series A rounds represented 60% of all deals in 2017; whereas early-stage share peaked in 2015 at 73% of deals. Additionally, some of the most well-funded drone companies are targeting enterprise and industrial inspection.

What this means for operators or businesses is greater affordability. Software advances, computer chip manufacturing techniques, and economies of scale will continue to drive down the cost of drone platforms and sensors and solutions.

Trend 5—Partnerships

This year we saw a change from synergistic merger and acquisitions to the creation of end-to-end solutions via partnerships. For example, look at how DJI’s enterprise partnerships have grown. Consider their AirWorks conference. What drone major vendor wasn’t there? The list included DroneDeploy, Measure, PrecisionHawk, Skycatch, and Sentera, to name a few.

This past year we also saw an uptick in regulators and industry stakeholder partnerships. For example, the Drone Advisory Committee was created to provide the FAA with advice on unmanned aircraft integration from a diverse group of stakeholders. Major commercial participants include Intel, DJI, Amazon, Google X, and Facebook, as well the Aircraft Owners and Pilots Association.

Consider also the FAA’s new UAS Integration Pilot Program. Here, government entities are partnering with private-sector companies, such as unmanned aircraft systems (UAS) operators and manufacturers, to submit proposals to the FAA to fly more advanced operations in their communities, including flying beyond line of sight and over people. This is significant because it’s clear that regulators want to include industry when creating policies.

However, there is some good news / bad news with this.

The good news is greater flexibility. With vendor partnerships, drones will be able to perform more types of data gathering in a shorter timeframe and with more precision than many other options. So, more aircraft, sensor, and software integration.

The bad news is operators and businesses have regulatory uncertainty. We advise our clients to plan for some uncertainty as technology, the public, and bureaucracy find common ground on operations for beyond visual line of sight and over people.

Challenges ahead

Here’s my list of the major challenges facing the drone industry in 2018:

  1. Regulations: We may see more regulatory red tape—e.g., a patchwork quilt of rules as the FAA’s UAS Integration Pilot Program begins to make policy.
  2. Public sentiment: Basic public concerns still exist about drone safety, security, privacy, and their public nuisance. My question is: How can we overcome this?
  3. Business value: We’ve yet to see credible ROI that hits the executive scorecard. The key question is: What monetary benefit do drones and information gleaned from drones provide shareholder value?
  4. Information accuracy: Up to now, drone vendors have been focused on the accuracy of image capture and the rigor of the drone system. For better business value, they need to focus on the accuracy of the data processing and the rigor of data analysis.
  5. IT data governance: This is especially the case for drone inspections where a single drone could collect 50 to 100 gigabytes of data. Managing these large data sets starts to become one of the things that have to be worked out.
  6. Automation: A lot of software automation will come, including artificial intelligence (AI) or algorithms that minimize the amount of human effort to distill all that information and get to some actionable inference. But large scale industrial use of AI is young and it requires manual intervention to distinguish the difference between near-similar objects.
  7. Endurance: We’re still on the quest for efficiencies like better power sources or mixes.
  8. Widespread business adoption: Business and industry adoption is growing, but it’s mixed because of factors such as business risk aversion, concerns over invasion of privacy, and a reluctance by many companies to share too much information about successes.

That’s it for now.

Listen to the companion podcast here http://bit.ly/2CXe6uK.

Look for a follow-up piece on our specific predictions for 2018, which will include investments, technology improvements, ecosystem partnerships, and software innovations.

If you have questions about what’s in the report I mention or would like to comment, write me at colin@droneanalyst.com.

Image credit: Shutterstock

I believe three of the biggest misconceptions in the drone industry is how fast it will grow, which sectors will grow, and which ones will lag.

No one disagrees that drones—both consumer and professional—represent a new and emerging market. Drone market forecasts abound. We currently track 73 independent companies that provide market forecasts, and each of them projects growth for the drone or unmanned aerial system (UAS) sector that is nothing short of phenomenal. Some of these, however, are questionable, because, at the time they were written, there were no historical sales or reliable market survey data on which to create a proper forecast. We wrote about this problem back in 2015 here. Still, today we still see a big gap between current forecasts and actual purchases, services, and business adoption.

In this article, I’m going to take a look at some of the data collected in our latest report on the drone industry—data we think is important to you and answers the question: “Why don’t we see widespread adoption of drones in my industry just yet?”

Business use defined

As part of our 2017 Drone Market Sector Report, we conducted a survey to identify the business users for drone-based projects and which industries have traction. We define “business users” as those individuals or companies that use or purchase drone-based imaging or sensing services. A total of 623 respondents answered our qualifying survey question that they either do such work themselves or contract out for it.

When we asked respondents about the primary commercial drone-based service they perform or purchase, the results show that:

  • the #1 business use is aerial photography and/or video at 31%,
  • the #2 use is surveying / mapping / GIS with 20%,
  • and the #3 use is construction (design, building inspection, or monitoring) at 6%.

Company size

To gauge the extent of drone use, we asked our business users about their company’s revenue, the number of projects they perform per month, and the number of remote pilots they employ. As with service providers, the numbers are low. For example, 75% of business users perform one to five projects per month.

The revenue figures of business users reveal an interesting trend as well. More than half (53%) are small and medium-size businesses (SMBs)—organizations with less than $10 million in annual revenue. Only 6% could be classified as a large enterprise, i.e., an organization that makes over $1 billion.

As we did with drone-based service providers, we asked these business users how many aviation-authority, licensed small UAS / UAV remote pilots they currently employ. The numbers were smaller than we expected. Almost three-quarters (74%) have five or fewer pilots; 50% have only one.

Certainly these numbers debunk the media hype about drones. There are not hundreds of thousands of drones flying now (certainly not at the same time), nor is it true that Millions More Drones Will Be Flying Above Your Head by 2020 and in this piece we make the case Why the Drone Network of Tomorrow is Farther Away Than You Think.

Limited success stories on integration

Our research finds widespread business adoption is being hampered by a reluctance to share too much information about successes.

Companies are depending on information communicated about drones by others that have been successful. Certainly the interest is there. You can see that from the diversity of industries attending the major U.S. commercial drone expos, such as InterDrone, Commercial UAV Expo, and Drone World Expo (which was just purchased by Commercial UAV Expo). Unfortunately, only a handful of companies (we estimate 75–100) are willing to come forward and present their use cases at these shows. Most of these presentations are not about companywide adoption, but rather about a particular, localized proof of concept.

There are positive messages in which the benefits of drones are explained, but communication about what a successful integration looks like is still very limited. Additionally, we find that companies that are already using drones are reluctant to share too much information, so they can continue to reap the benefits of their early investments. As a result of this reluctance to share information, further integration lags as companies wait on successful user stories that may never appear.

Bottom line

Unfortunately, the media all too often equates the business use of drones with drone delivery, and only reports on the headline-seeking efforts of Amazon, Google, and Facebook. There is so much more that’s actually happening, and it’s getting difficult to generate a comprehensive story on business use. Some of this can be attributed to the fact that many of the major industrial users are starting to focus only on the use cases that matter to them. The most concrete examples of this are the NAB Show, which brings together photography, video, and cinema professionals; the Energy Drone Coalition Summit, which is bringing together the major drone / UAV ecosystem players with the energy industry asset owners and end users; the American Society for Photogrammetry and Remote Sensing (ASPRS), which hosted a pre-conference UAS Technical Symposium this year at the Commercial UAV Expo, and will co-locate with the International LiDAR Mapping Forum in 2018.

That said, we will continue to do research on individual verticals and report growth and adoption issues.

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

Image credit: Shutterstock

I believe three of the biggest misconceptions in the drone industry is how fast it will grow, which sectors will grow, and which ones will lag.

No one disagrees that drones—both consumer and professional—represent a new and emerging market. Drone market forecasts abound. We currently track 73 independent companies that provide market forecasts, and each of them projects growth for the drone or unmanned aerial system (UAS) sector that is nothing short of phenomenal. Some of these, however, are questionable, because, at the time they were written, there were no historical sales or reliable market survey data on which to create a proper forecast. We wrote about this problem back in 2015 here. Still, today we still see a big gap between current forecasts and actual purchases, services, and business adoption.

In this article, I’m going to take a look at some of the data collected in our latest report on the drone industry—data we think is important to you and answers the question: “Why don’t we see widespread adoption of drones in my industry just yet?”

Business use defined

As part of our 2017 Drone Market Sector Report, we conducted a survey to identify the business users for drone-based projects and which industries have traction. We define “business users” as those individuals or companies that use or purchase drone-based imaging or sensing services. A total of 623 respondents answered our qualifying survey question that they either do such work themselves or contract out for it.

When we asked respondents about the primary commercial drone-based service they perform or purchase, the results show that:

  • the #1 business use is aerial photography and/or video at 31%,
  • the #2 use is surveying / mapping / GIS with 20%,
  • and the #3 use is construction (design, building inspection, or monitoring) at 6%.

Company size

To gauge the extent of drone use, we asked our business users about their company’s revenue, the number of projects they perform per month, and the number of remote pilots they employ. As with service providers, the numbers are low. For example, 75% of business users perform one to five projects per month.

The revenue figures of business users reveal an interesting trend as well. More than half (53%) are small and medium-size businesses (SMBs)—organizations with less than $10 million in annual revenue. Only 6% could be classified as a large enterprise, i.e., an organization that makes over $1 billion.

As we did with drone-based service providers, we asked these business users how many aviation-authority, licensed small UAS / UAV remote pilots they currently employ. The numbers were smaller than we expected. Almost three-quarters (74%) have five or fewer pilots; 50% have only one.

Certainly these numbers debunk the media hype about drones. There are not hundreds of thousands of drones flying now (certainly not at the same time), nor is it true that Millions More Drones Will Be Flying Above Your Head by 2020 and in this piece we make the case Why the Drone Network of Tomorrow is Farther Away Than You Think.

Limited success stories on integration

Our research finds widespread business adoption is being hampered by a reluctance to share too much information about successes.

Companies are depending on information communicated about drones by others that have been successful. Certainly the interest is there. You can see that from the diversity of industries attending the major U.S. commercial drone expos, such as InterDrone, Commercial UAV Expo, and Drone World Expo (which was just purchased by Commercial UAV Expo). Unfortunately, only a handful of companies (we estimate 75–100) are willing to come forward and present their use cases at these shows. Most of these presentations are not about companywide adoption, but rather about a particular, localized proof of concept.

There are positive messages in which the benefits of drones are explained, but communication about what a successful integration looks like is still very limited. Additionally, we find that companies that are already using drones are reluctant to share too much information, so they can continue to reap the benefits of their early investments. As a result of this reluctance to share information, further integration lags as companies wait on successful user stories that may never appear.

Bottom line

Unfortunately, the media all too often equates the business use of drones with drone delivery, and only reports on the headline-seeking efforts of Amazon, Google, and Facebook. There is so much more that’s actually happening, and it’s getting difficult to generate a comprehensive story on business use. Some of this can be attributed to the fact that many of the major industrial users are starting to focus only on the use cases that matter to them. The most concrete examples of this are the NAB Show, which brings together photography, video, and cinema professionals; the Energy Drone Coalition Summit, which is bringing together the major drone / UAV ecosystem players with the energy industry asset owners and end users; the American Society for Photogrammetry and Remote Sensing (ASPRS), which hosted a pre-conference UAS Technical Symposium this year at the Commercial UAV Expo, and will co-locate with the International LiDAR Mapping Forum in 2018.

That said, we will continue to do research on individual verticals and report growth and adoption issues.

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

Image credit: Shutterstock

We just released a new research report titled “Five Valuable Business Lessons Learned About Drones in Public Safety and First Responder Operations.” This is the fifth and final in a series of white papers intended to share lessons learned in specific industries and how to maximize the value drones can deliver in those industries. This year, we built on the analysis we did for the 2016 “Truth About” papers by incorporating real-world experience gained from businesses and drone pilots operating under the Federal Aviation Administration’s Small Unmanned Aircraft Regulations (aka FAA Part 107).

In this new report, we validate how first responders are sending unmanned aerial vehicles into high-risk or remote emergency situations before putting first responders at risk while helping victims more efficiently. We detail best practices for how police, fire, emergency response, and search & rescue agencies can implement drones into their operations. Learn both the strategies and roadblocks to the successful use of drones in this industry, including:

  • Which licenses are required for employees flying drones
  • How to pick the right drone for your specific operation
  • The importance of a roadmap for training and drone maintenance
  • How to deal with the public in a safe and transparent manner
  • When to outsource drone work

Here is an excerpt from the white paper:

Lesson 3 – Training is multifaceted and should not be an afterthought:

“Buying a drone and training go hand-in-hand.  DJI Director of Education Romeo Durscher recommends thorough training on several topics. This includes basic training—as in Part 107 pilot training and “stick time” on the controls of your aircraft of choice—and advanced training for tactical use, e.g., learning the best way to manage the drone before, during, and after deployment.

Gene Robinson (and the Drone Pilot training team) include these and add additional layers of training gleaned from his years of experience as head of Unmanned Aircraft Operations for the Wimberley Fire Department. Some of those experiences and lessons learned are outlined in a white paper on the 2015 Texas Memorial Day flood.  That paper reports that drones—and at one point 16 manned aircraft—were used for disaster relief for multiple days, but not without problems. Problems included multiple rogue manned and unmanned aircraft being operated within the temporary flight restriction, the loss of communication abilities via cell, the line-of-sight problems with handheld aviation radios, and the inability to request FAA approval to operate in the area.”

The report goes on to describe what many police, fire, and emergency responders have learned about what works and what doesn’t. It details mistakes early adopters have made operating their drones and recommends the actions you should take so your implementation and ongoing use is successful.

You can watch a short video here and get the free report here: http://bit.ly/2u5NVBu

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

Image credit: EENA

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 10-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

As many of you know I’ve been researching and writing about agriculture drone solutions since early 2012. I recently came across this OpEd in PrecisionAg titled “Opinion: The Agricultural Drone War Is Over, And They Lost” and read it with great interest. Two and half years ago, our research indicated the same thing—that small drones might not be able to deliver more usable data to a farmer or provide a cost benefit over the existing image solutions available to them.

Even last year I had my doubts. In our June 2016 report, The Truth about Drones in Precision Agriculture, we looked at how drones have been used as remote sensing devices in agriculture thus far, reviewed competitive and traditional approaches using incumbent technology (like satellites and manned aircraft), and discussed the opportunities and challenges posed by the technology itself.

But a lot has changed since then.  Agriculture drones have matured, and so have the sensors and analytical solutions that support them.  A rising number of software vendors are targeting the agriculture space with increasingly useful solutions. And a new generation of drones is delivering much-needed functionality.

Not all agriculture drone solutions are created equal, so it pays to do a bit of research before committing. There are many factors to consider, from software compatibility to price to technical capabilities such as:

  • Can you get all the components—drone, sensor, software, and analytics—from one company?
  • Is an internet connection required in order to process data?
  • Will it integrate well with your existing tools?

The research process to find the best solution can be overwhelming and time-consuming, but there is some good news. We’ve done a fair amount of this work already which you can access in our latest report, Using Drones to Ensure ROI in Precision Agriculture.  You’ll also find a checklist there to help you determine which solution is the best fit.  Here is an excerpt:

Nearly all agriculture drone solutions process RGB color, near infrared (NIR), and normalized difference vegetation index (NDVI) data.  But not all solutions provide additional analytics and tools better matched to the needs of growers and agronomists. For example, only one solution we know of in the market allows users to view live NDVI data via streaming video while the drone is flying without an internet connection. This means you can more easily fly missions and see critical information at the field’s edge without requiring a trip back to the office. This eliminates a huge bottleneck. Most solutions require that you upload images from the UAV to a mobile device, a laptop or cloud service where they are stitched together to create a base map and the underlying spectrum data is processed into a usable NDVI layer.  In most solutions, you have to wait for that information—sometimes for hours. But with this solution you don’t have to do that, and the added benefit is you can use the time savings to gather additional inputs from the areas the real-time map shows as suspect.

The report goes on to detail the following:

  • The importance of timely inputs
  • New analytics and tools
  • The importance of an integrated solution—sensor, drone, and analytic data platform
  • The challenges of understanding ROI
  • The benefits of end-to-end solutions

You can get the report, plus an End-to-End UAV Solution Checklist for Precision Agriculture, here. 

Look for another report from us on this topic soon. If you have questions about information in the report or would like to comment on it after reading, write me at colin@droneanalyst.com.

Image credit: Sentera

Innovations will flourish on drones that target the prosumer market for a long time

THE FACTS:

In the 1980 book, The Third Wave, futurologist Alvin Toffler coined the term “prosumer” when he predicted that the role of producers and consumers would begin to blur and merge. Today, the term is well accepted as a descriptor for camcorders, digital cameras, and similar goods. Prosumers are enthusiasts who buy products (almost always technical) that fall between professional and consumer-grade standards in quality, complexity, or functionality. Prosumer also commonly refers to those products.

Recently, a well-respected analyst mentioned that his firm thought that prosumer drones would disappear from the market in the near future. At the time, I thought this quite bizarre—because our research says exactly the opposite. I’m still shaking my head.

Earlier this year, we released “Drones in the Channel: 2016 Market Report,” a research study examining drone sales and distribution channels in North America. It’s the first in-depth study of drone sales that reveals the buying patterns of both consumers and professionals.  The report has a detailed analysis that calls into question the commonly held and often undefined prosumer term. I’ll summarize the salient points of that research and offer insights into why I think the prosumer drone is here to stay.

WHAT BUYERS SAY:

We approached our research without preconceptions about commonly held terms used to describe drone segments or tiers, such as “consumer,” “prosumer,” and “professional.” Since all drones sold—no matter what the price point—are purchased by a consumer, we believe the best way to sort out these terms was by understanding the purchaser’s intended use. Our findings are summarized in the chart image in Table 1.

TABLE 1 – DRONE PRICE / MARKET SEGMENTS

price-chart-3

Source: Skylogic Research, LLC

As you can see from the chart, “prosumer” is—as we have defined it—a very narrow category and the majority of prosumer buyers purchase their drone with either civil / commercial or public / governmental use in mind. Overall, the data we collected from the quantitative portion of this study finds 61 percent of respondents said they purchased a drone in the $1,000 to $2,000 price range explicitly for professional use.

What is even more interesting is what respondents said they paid for their most recent drone.  Figure 1 shows those results. More than half of buyers purchase drones costing between $1,000 and $4,000.  We calculate that the mid-price range is $1,400.  Readers should note that $1,400 is the approximate cost of the popular DJI Phantom 4, Yuneec Typhoon H, and the just released DJI Mavic Pro, and together these brands account for approximately 72 percent of all drones purchased in the $1,000 – $2,000 price range.

FIGURE 1 – DRONE PURCHASE PRICE POINTS

WHAT OTHER ANALYSTS MISS:

  1. The Film/Photo/Video market is—and will probably always be—the largest commercial drone market segment. Our survey data going back to 2014 and even our most recent report confirms this. Most analyst forecasts—even at the large firms like Gartner, Teal, and PwC—don’t account for the full potential of drones in that segment, nor do they incorporate any first-hand knowledge from those who’ve already operated in that segment. The photographic, film, and real estate industries have known for years that small drones are a more viable and less costly substitute for manned aerial photography. It’s also no secret that this market is already established and towers above all others both in revenue and number of existing service providers (see what I wrote about that here).
  1. All the major mission planning and mapping applications like DroneDeploy, PrecisionHawk’s DataMapper, and Skycatch Commander (and dozens more) now run with the DJI SDK. Most of these started off with applications dedicated to their own drone but soon found that most professionals want to use the simpler and more reliable DJI prosumer drones.
  1. The prosumer drone category is the only place where sales volumes and margins are strong enough for manufacturers to recoup R&D investment. As I wrote about in Sense and Avoid for Drones is No Easy Feat, you can see this trend now with obstacle avoidance technology.

BOTTOM LINE:

Prosumer drones have already created new sources of demand for aerial imaging, and this will continue in earnest. As with land-based photography and video services, the financial and technical barriers to entry are low, making it easy for businesses to begin offering drone-based services. Now that the regulatory hurdle is low with Part 107, more new entrants will create demand for this segment.

Image credit: YUNEEC

This post first appeared on DRONELIFE.com