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Diversity and Hype in Commercial Drone Market Forecasts

Have you noticed the growing number of market forecasts for the commercial drones industry?  I have.  Not a week goes by that a new one doesn’t hit my radar.  I’m currently tracking about 15.  Each in one way or another delivers growth projections for the drone or unmanned aerial system (UAS) sector that are nothing short of phenomenal.  But are they, really?

In this post, I’m going to share three secrets to help you understand forecasts better, unpack the hype and diversity of market reports, and hopefully leave you skilled enough to ‘cry foul’ when you see a new report that is, well, questionable. At the end, I’ll give you my personal take on the most popular forecast reports.

THREE SECRETS

  1. All forecasts are wrong

No one argues that forecasts and market projections are a critical part of business planning, management, and strategy.  However, the first thing you learn as a forecaster (I was one) is that forecasts are always wrong – it’s just a matter of how wrong. You also learn that the further out in time you forecast (1 year vs. 10 years), the greater the error. And while that might sound gloomy, it is reality, and if you are looking to start or invest in a commercial drone business and you are relying on these forecasts, you should recognize an important trap.

Proper forecasts are created by taking actuals (historical unit sales, purchases, revenue, etc.) and projecting forward in time some kind of trend – either flat, up, or down. Statisticians know that the more historical data you have the greater likelihood your projection will be accurate. But what happens when there is no history to go by?  Such is the case with the commercial drones market.  It’s a nascent industry, and we have little to no historical data.  So here’s the trap. Forecasters have to either borrow historical data from a similar industry or size a market potential with a proxy.

But sometimes the proxy is wrong. Such is the case with the Association of Unmanned Vehicle Systems International (AUVSI) The Economic Impact of Unmanned Aircraft Systems Integration in the United States. It has become the most repeated forecast for the commercial drone market, garnering media attention typically reserved for celebrity weddings and babies born to royalty.  Its bottom line forecast is that the UAS market will reach a whopping $82 billion in the 10 years after the FAA issues favorable regulations and that the precision agriculture market will “dwarf all others.” But as we’ve dissected in Five Reasons the AUVSI Got Its Drone Market Forecast Wrong (and subsequently here and here) the proxy, the methodology, and the conclusion is wrong – very wrong.

That’s sad — and a big disservice to the community. Venture investors have a huge variety of questions about the commercial drone market, but two questions stand out in terms of their importance.  The first is: What is hype and what is reality?  The second is: Is this market really a big, high-growth, high-margin market?  If you rely solely upon media hype and AUVSI, your answer would be an unequivocal Yes. The commercial drone market is the biggest, highest growth, best new market opportunity to come along in decades (or maybe centuries…). Really?!

  1. Regulations raise uncertainty

In some markets, traditional forecasting methods just don’t work. Such is the case with the regulated markets. Commercial drones are and will continue to operate in a regulated market – regulated not in the sense that governments are setting price floors or ceilings, but rules that allow or disallow certain commercial activities – like what airspace you can operate in and whether you can operate beyond visual line of sight (BVLOS). (For more on the BVLOS issue see article here.)

Even so, the global drone industry has not sat back waiting for government policy to be hammered out before pouring investment and effort into new ventures. The latest data from CB Insights shows drone startup funding is hitting new highs. Firms have raised more in 2015 than the last three years combined.

The problem is many of those funded vendors are beginning to invest in drone technology (like BVLOS automation) which may take years to be legal. Additionally, some investment is in consumer drone manufacturers that may want to aggressively target specific commercial sectors through acquisitions, internal development, partnerships, and second-tier investment but do so without regard to an actual intended commercial product and/or application. It looks good in a headline, but the devil really is in the detail, as I have noted in FAA Proposed Drone Rules: Market Opportunity Winners and Losers.

  1. Some segments are indistinct

With the advancement of model aircraft and camera technology, it’s not easy to distinguish between a consumer drone and a commercial drone.  For example, low-cost camera drones like the DJI Phantom 2 Vision+ and 3DR IRIS+ are sold as consumer products, but marketed to and purchased by professionals who use them for commercial purposes like aerial photography, film making, and videography. Add to this trend the growing number of vendors like Pix4D that provide integrated software specifically for mapping and modeling, and now you have surveyors and geographic information system (GIS) professionals using them in their practices.

So what’s the buyer of a market forecast to do? The report says “commercial” but how can they distinguish the size of the particular market you intend to service or invest in if so many drones are sold for hobby but then used for business? Sorry, I don’t have a happy answer for you. It’s virtually impossible in every case to delineate the difference between the consumer and commercial drones market. If you want to come close a rational number, then you are going to have dissect the numbers yourself and make assumptions about your market based on things like gating factors that drive adoption rates, competing technology, and the price elasticity of incumbent providers. You can factor aircraft sales, but I wouldn’t use it as the base for a market forecast.

THE ROUNDUP

Here’s my take on the most popular forecasts. Note that several of these are sold by resellers.

BI Intelligence – has a 32-page report for subscribers (~$400) that forecasts total cumulative drone spending over the next 10 years (2015 to year-end 2024) of $111 billion. It also forecasts that $15 billion of that will be spent on commercial/civilian applications, including R&D costs, software, and hardware. But looking into the numbers it basically recycles AUVSI’s bogus numbers and then ups the Teal Group’s already inflated (and out of touch) forecast.

ABI research – has a research report available to subscribers that says the small UAS market will surpass $8.4 billion by 2018 and by 2019 the commercial sector will dominate the overall small UAS market with revenues exceeding $5.1 billion, roughly five times larger than the prosumer/hobby market, and 2.3 times greater than the military/civil market segment. I respect the work of this firm, but as you can see from the graph in this article they consider prosumer as part of hobby and not commercial as would be relevant. Still, I agree with Dan Kara: “The money to be made is actually in the application space to a large degree.”  So why don’t they forecast that as a segment of commercial?

Markets and Markets – sells a 180+ page report on the commercial drones market by type, technology, application, and geography for $4,560. They expect the global market for small UAS to reach $1.9 billion by the end of 2020. They state the obvious and say the increase in civil and military applications remains the driving factor for the global small UAV market. They go on to say that among all the key applications (law enforcement, energy and power, manufacturing, infrastructure, media and entertainment, agriculture, and scientific research) law enforcement will hold the largest market share at ~25%. My research says the opposite it true – at least in the U.S. That’s because adoption by local and state police agencies here already is and will continue to be fraught with controversy over privacy and Fourth Amendment rights.

Idate Research – sells a $2,300 54 page report with a forecast covering 2014 to 2020 for commercial and consumer drones. They predict that once a suitable regulatory framework is introduced and no significant disruption takes place, nearly 170,000 commercial drones will be operating across the globe by the end of 2020, alongside about 12 million hobby drones.  It’s hard to tell how they arrive at these numbers since their methodology is primarily qualitative, e.g., obtained from one-on-one interviews and not quantitative or established by cross-referencing public sources and external databases.

Lux Research – has a report available to subscribers that says the commercial UAV market will grow to $1.7 billion by 2025 but will be held back by regulations.  It also says that agriculture tops applications and will generate $350 million in revenues in 2025, led by uses in precision agriculture. It envisions utilities to be the second biggest segment at $269 million, and oil and gas third at $247 million. Right off the bat you can discount their numbers since it’s been established over and over that agriculture will not lead the market. Clearly they have not researched thoroughly this or other markets like GIS. Also, their overall number is quite low. DJI is projected to sell above $1 billion in consumer drones in 2015. Given the market tendency for these to be used commercially you can see their 2025 number is not rational.

FINAL THOUGHTS

As you can see there is a wide disparity of assumptions and time horizons – which is why I didn’t create a comparison table.  And you can see some of these reports are quite expensive. Will you get an ROI from them?  Perhaps. But in some cases the best advice may be that of Will Rogers: “The quickest way to double your money is to fold it in half and put it in your back pocket.”

I would to hear your thoughts on these market forecasts.  Send me your comments or write us colin@droneanalyst.com.

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Five Observations about the Camera Drone Market from NAB 2015

By Steve Maller for Drone Analyst

My brief but productive visit last month to the 2015 National Association of Broadcasters (NAB) in Las Vegas showed me just how fast the camera drone market is heating up. More than 97,000 people in media and entertainment attended this year, and the show featured for the first time an Aerial Robotics and Drone Pavilion with a fully enclosed “flying cage” for demonstrations. It was so well attended that one writer called the NAB 2015 “The Year of the Drone.”

Much has already been written about how drones impacted the show, and you can find good articles here and here.  I was particularly impressed with FreeFly System’s ALTA high-end drone because it represents what I consider to be a prime example of just how advanced unmanned aircraft systems (UAS) technology have become. You can find my post on that here.

As a post-show wrap-up I offer five observations about the state of the aerial film / photo / video drones market:

LAND GRAB. Anticipation of long-awaited regulatory changes in the U.S. is creating a frenzy of opportunity and activity and a frenetic land-grab. It’s already been observed here that film / photo / video is and will continue to be the largest commercial market for drones. SPECIALIZATION. Many large and small companies are designing and marketing highly specialized camera platforms – many of which are even geared to only one of the film /photo / video applications. Take for example Intuitive Aerial’s Aerigon. It was built ground up for use with heavy, cinema industry-standard cameras like the Red Epic. This specialization implies maturing market demand. UAS-CAMERA INTEGRATION. Complete integration between UAS and camera is now common, either through proprietary cameras (such as DJI’s Inspire 1 and Phantom 3) or through partnerships with existing camera manufacturers (such as 3DRobotics’ Solo and GoPro HERO4). Complete or partial flight autonomy is being heavily developed by manufacturers even without solutions to complicated problems like sense-and-avoid and no-fly zones. This is a dangerous precedent as I do not believe the industry can deliver on its promise of reliably and safely without addressing these air traffic control concerns. I don’t see standardized solutions to these issues on the market yet. But fortunately operator training programs are appearing like FlySafe and Unmanned Safety Institute that can improve operating safety through education and promotion of safe practices. COOL FACTOR. Mainstream audiences are beginning to see what us aerial film / photo / video pioneers have seen for a while — that camera drones are tools for getting better shots. A year ago, the word ‘drone’ was heavily discussed by the UAS community as being sorely in need of a less menacing synonym, but today it doesn’t seem to matter. Drones are now ‘cool,’ – something that I don’t think anybody expected to happen so soon. Sure, the ones carrying Hellfire missiles and eavesdropping on terrorist mobile phone calls are still out there, but folks on the street are beginning to understand the difference.

This year promises to be the most exciting and eventful one yet for the world of camera drones.  Who knows what innovation we will see next?  In the meantime, we would to hear your thoughts on this market.  Send us your comments or write us info@droneanalyst.com.

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FAA Proposed Drone Rules: Market Opportunity Winners and Losers

On February 15, 2015, the commercial drone industry breathed a collective sigh of relief. The Federal Aviation Administration’s proposed new rules for small unmanned aircraft systems seemed, at first blush, somewhat practical.  The FAA regulations will eventually allow commercial operations of drones that weigh under 55 pounds in U.S. airspace, without requiring operators to acquire a pilot’s license. You can read the full 195 pages of proposed rules here (hereafter sUAS notice of proposed rulemaking, or NPRM) and some analysis about them here, here, and here.

In this post, I’ll focus on what I think are the immediate economic winners and losers.  My analysis is concentrated on the business impact and market opportunities that the proposed rules have for drones manufacturers, distributors, service providers, and investors.

What do investors need to know?

According to CB Insights data, 2014 investments in the budding drone industry topped $108M across 29 deals. Year-over-year funding increased 104% as venture firms jumped into the drone space with sizable bets. Still, over the past couple of years, I’ve heard VCs and potential investors discussing the FAA bottleneck and questioning whether this was the right time to invest.  Regulatory uncertainty has kept many on the sidelines. But this new clarity should help investors, including those interested in investing in operational and data / information services.

Clarity comes in not only knowing what the rules will look like, but also in the FAA’s commitment to no longer regulate UAS like they do manned aircraft — and in no uncertain terms the U.S. Department of Transportation’s (DOT) understanding of the macro-economic impact of commercial sUAS. In a document captioned Notice of Proposed Rulemaking Regulatory Evaluation, Small Unmanned Aircraft Systems, the author states:

“This proposed rule would create an enabling business environment which would encourage the growth of private sector activity in the manufacturing and operating of small UAS. Therefore, the major benefit of this proposed rule is that it would enable new non-recreational aviation activities for small UAS in the NAS where such operations are currently not permitted without an FAA-issued exemption. The private benefits would exceed the private costs if there is only one UAS and that UAS operation earns a profit.”

As noted here, it’s possible this is a leaked early draft that has since been revised or is otherwise incomplete or inaccurate. Still, the DOT evaluation explores in depth four potential markets: aerial photography, precision agriculture, search and rescue/law enforcement, and bridge inspection. These fall more in line with what I believe are the proper commercial market segments:

Precision Agriculture Inspection / Surveillance Mapping / Surveying Film / Photo / Video Public Safety / First Responders

As I see it, all of these markets are winners, but some are bigger winners than others. The devil is in the details, because success in each market depends what type of sUAS operation the sUAS NPRM allows or doesn’t allow.  The FAA summarizes these operational limitations here, and I’ll discuss each market below.

Precision Agriculture – Winner and Loser

Precision agriculture is a farming management concept based on observing, measuring, and responding to inter- and intra-field variability in crops. Precision agriculture uses detailed, site-specific information to manage production inputs. Information technologies enable segmenting a farm into smaller units to determine the characteristics of each individual segment.

For the most part, the proposed rules support the farmer’s and/or researcher’s ability to locate a precise position in a field, observe it, and create maps of as many variables as can be measured — but only on a small scale. That’s because all observation and measurement would have to be done by a drone that is within visual line of site (VLOS) of the operator. The problem is that fields and farms are big– bigger than VLOS.

Sure, operators could conduct many operations in a day by moving section to section to section and stitching together larger maps, but this is costly – both in terms of manpower and time. Even if it was cheaper, the market potential for drones in precision agriculture still needs more vetting. It’s not yet clear how a sUAS can deliver more usable data to a farmer or provide a cost benefit over the existing manned aircraft or the satellite image solutions available to them today (see Film or Farm: Which is the Bigger Drone Market? – Part 2 for more on this).

Bottom line: Demand for turnkey drone systems will increase as farmers and service providers work within the rule constraints (see my list of drone vendors serving agriculture  here). However, the big caveat is drone usage alone will not “transform agriculture” just yet.  For that, we would need to see a change in the adoption rate for variable rate technology (such as applicators) — which is currently down. So, if you are banking on precision agriculture data services, you will continue to see competition from incumbents and continue to see slow adoption for now.

Inspection / Surveillance – Big Winner

With sUAS’s ability to perform functions like perch-and-stare, video capture, and laser scanning, they are poised to replace many of the dull, dirty, and dangerous functions of inspection and surveillance. The main beneficiaries are civil and public entities that perform enterprise asset management (EAM) and facilities/infrastructure management.

Never is the benefit more evident than in the energy, telecomm, and construction verticals.  For example, the sUAS NPRM mentions power-line/pipeline inspection in hilly or mountainous terrain and antenna inspections (page 8f) as examples of possible operations that could be conducted under the proposed framework.  The DOT evaluation goes further and dedicates a whole section on bridge inspection (section IV.A.1.d. page 21ff). I would add to this structures like buildings, oil rigs, refinery flare stacks, cell towers, and wind turbines.

GIS professionals should pay particular attention to the bridge example. The National Bridge Inspection Standards (NBIS) mandates that routine inspections be performed at 24-month intervals. With almost 600,000 bridges in the United States and 300,000 requiring inspection each year, the DOT evaluation report estimates that about 45,000 annual bridge inspections could utilize some form of small UAS. Multirotors in particular are highly adept at getting into tight spaces.  With advent of smaller/lighter survey grade LiDAR, the combo provides a stable and portable platform for precision scanning of bridges. I think drone products and services that target GIS firms are hot—you can read why here.

Bottom line: Demand for and use of drones (especially multirotors) dedicated to asset and infrastructure inspection will see a big uptick. There is also now a very large opportunity for firms like Accenture and IBM to provide information architecture and data integration services for drone data to existing enterprise and mobile applications like SAP EAM and Oracle EAM.  I also see opportunities for companies to provide motion imagery, video analytics, object recognition, and image metadata processing solutions.

Mapping / Surveying – Winner and Loser

As I mentioned above, the new rule supports the ability to locate a precise position, look at it, and collect the data to create maps on a small scale. Again, that’s because all observation and measurement would have to be done within VLOS of the sUAS operator. The problem here is many mapping projects are bigger than what can be captured in VLOS.  As in the precision agriculture example, operators could conduct many operations and stich together larger maps, but this may be more costly than what can be currently conducted by manned aircraft.

Rules aside, good solutions exist today that support autonomous missions beyond line of sight (BLOS) and therefore create large maps in one flight.  Some investors in this market may be disheartened by the proposed rules that restrict flight to VLOS, since so much effort has been put into autopilot / mission planning / ground control solutions.  Nevertheless, almost all of the existing solutions provide semi-autonomous flight capability where the operator is still in control (or can take back control). You just won’t be able to fly multiple drones at the same time. The proposed rules are one operator, one drone.

Bottom line: The surveying industry has the most to gain here. The door is wide open for drone operations like stockpile measurement and small open pit mine mapping.  The door is also open for laser scanning, 3D imaging capture, and data processing that architectural engineering firms can consume.  As such, there are new opportunities for dedicated and differentiated cloud-based in-memory processing data services.

Film / Photo / Video – Big Winner

The DOT evaluation dedicates a whole section to aerial photography (section IV.A.1.a. pages 16ff).  It says:

“Small UAS industry experts have informed the FAA that a proposed rule could enable a viable market for small UAS aerial photography.  These unmanned aircraft operators would likely specialize in low-altitude aerial photography and video. Consequently, once a small UAS aerial photography market becomes established, it would increase safety by substituting an unmanned aviation operation using a very light aircraft for a more complex manned aviation operation that uses a much heavier aircraft.”

Really? The photographic, film, and real estate industries have known for years small UAS 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).

Bottom line: Drones have already created new sources of demand for aerial photography, and this will continue in earnest. As with land-based photography, the financial and technical barriers to entry are low, making it easy for businesses to begin offering sUAS-based film and photography services. Now that the regulatory hurdle looks to be low, expect aircraft vendors and specialty retailers to flourish, too.

Public Safety / First Responders – Uncertain

The DOT evaluation dedicates an entire section to “Search and Rescue/Law Enforcement” (see section IV.A.1.c. page 19 ff).  It describes how small UAS missions can create significant cost savings to federal, state, and local government entities because they offer a more economical alternative to manned helicopters. The report estimates (page 20):

“…a significant number of public entities will contract the services of a small UAS operator. … The FAA and industry expect that some of the larger public entities would train their own operators and purchase and operate their own small UAS. The majority of the smaller public safety departments that could not afford to train their officers to fly a small UAS would contract these services out to commercial small UAS enterprises as the need arises.”

If true, this would create a viable market. But there a few catches. The first catch is the proposed rule does not allow sUAS operations at night. The second is there are or will be local rules to contend with that prohibit certain types of operations, like surveilling criminal suspects.  The third is the recent Presidential Memo creating standards for how government agencies and some recipients of federal funds will address the privacy issues associated with drones.

Bottom line: Under the proposed rules, demand for turnkey drone solutions and services for police, fire, and emergency medical services is uncertain.  Technology adoption by fire and rescue may be good, but adoption by local and state police agencies will no doubt be fraught with continued controversy over privacy and Fourth Amendment rights.

Conclusions

Almost all drone industry insiders expect the clarity about forthcoming rules to foster investment that will create new jobs and spur economic growth — if not now, certainly when the proposed rules become law in 2016 or 2017. Expect then to see increased productivity, improved worker safety, and saved lives.  In the meantime, the FAA wants to hear from you about the proposed rules (see 31 Questions the FAA Wants you to Answer).

I would love to hear your thoughts about the proposed rule for commercial drone use. Feel free to comment or write me at colin@droneanalyst.com.

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Commercial Drone Markets: 2014 Year in Review

Judging by the headlines, 2014 turned out to be the year for drones. I referenced in Tweets a total of 503 articles with the word ‘drones’ in the headline last year.  A Google search brings up about 61.4 million results referring to ‘drones.’  Granted, that search includes references to military and hobby drones, but it still delivers higher results than other years.  If the first theme of 2014 was the rise in popularity of drones, the second theme was how hamstrung the commercial markets are in the U.S. because of a lack of regulations. But there’s more going on than the buzz and frustration with FAA progress; in this post, I’ll review what I think were the five most significant commercial market trends for drones in 2014.

‘Drones’ Got Hyped

As mentioned, 2014 brought lots of hype about drones in the media, and investors can’t tell fact from fiction.  Here’s one example where a writer and industry analyst asserts that the civilian commercial market for unmanned aircraft systems (UAS) will dwarf that of the military. But the evidence shows otherwise. My colleague Mitch Solomon summarizes the problem well in this article:

“Venture investors have a huge variety of questions about the commercial drone market, but two stand out in terms of their importance.  The first is: what is hype and what is reality?  Put another way, is this market really a big, high growth, high margin market?  If you rely solely upon media hype and AUVSI [Association of Unmanned Vehicle Systems International], your answer would be an unequivocal: yes, the commercial drone market is the biggest, highest growth, best new market opportunity to come along in decades (or maybe centuries…AUVSI shows the US commercial market at over $1 billion in the first year after regulations are approved by the FAA.  (Really?!).”

Like Mitch, I’m not so quick to buy the media hype or AUVSI’s forecast (for more on that, see this article), and my market view is much more pragmatic and measured. Still, if tier-one venture investors are asking questions about the hype, then that is a good sign. It means that while there is interest in the space, investors will need to work smarter to make sure capital won’t be wasted chasing fictional opportunities.

Oil and Gas Inspections in the U.S. Got a Frivolous Beginning

While drone inspections of land-based refinery flare stacks have been permitted in other countries for some time, it wasn’t until June of this year that the FAA granted permission for the first commercial drone for this industry in the U.S.  Problem is, it wasn’t for the same purpose. That permission went to oil company BP and drone manufacturer AeroVironment to fly aerial surveys of over Alaska’s North Slope.

The lack of real-world consequence of this permission is best stated in this article. Until June, the FAA has approved drones for public safety, such as police or firefighters, or for academic research, on a case-by-case basis. Most of those cases were for use cases similar to flare stack inspections (perch and stare) and were for small, versatile drones with relatively low-cost technology.  But this was for an expensive 10-year-old military spec fixed-wing drone that has limited commercial viability. As the article states:

“The FAA is essentially using the military’s prior experience with this specific drone platform in place of the agency’s airworthiness certification requirements, so it is not an option for people hoping to use the newer drones being designed by high-tech startups that are not involved in military applications,” [Brendan] Schulman said. “It is a small step in the right direction but really only for companies who want to operate in very remote locations using military surplus equipment.”

Drone Cinematography Came Out of Shadows

As this research points out, filmmaking, video, and photography drones have flown commercially without FAA authorization for years now.  It’s no surprise, then, that this is the biggest and most mature commercial market for drones. Notwithstanding, drone regulation was among many issues the Motion Picture Association of America (MPAA) lobbied on in 2012 and 2013, at a total cost of $4.11 million. The MPAA has been constantly appealing to the FAA to let them use smaller drones for film-making purposes. It seems that lobbying paid off.  In September, the FAA granted regulatory exemptions to six TV and film production companies to operate drones on sets: Astraeus Aerial, Aerial MOB, HeliVideo Productions, Pictorvision, RC Pro Productions Consulting, and Snaproll Media.

There is a catch here.  Operators are required to hold private pilot certificates. This has many scratching their heads.  Why do commercial remote control operators need to learn how to land a Cessna when they’ve been operating these drones safely for years as ‘hobbyists’ without that requirement?

Agricultural Drones Got A Reality Check

A reality check is an assessment to determine if one’s circumstances or expectations conform to reality.  This certainly is the case with the market for agricultural drones.  It needed a reality check because of the hype created by AUVSI study titled The Economic Impact of Unmanned Aircraft Systems Integration in the United States. It claims 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.”  To this day, that fiction gets repeated over and over again in the media.

The market potential for drones in precision agriculture needs vetting—see Film or Farm: Which is the Bigger Drone Market? – Part 2 for my thoughts on this. It’s not yet clear how a UAS can deliver more usable data to a farmer or provides a cost benefit over the existing image solutions available to them today. But don’t take my word for it–watch this video of Rory Paul at the 2014 sUSB Expo for his take on the misconceptions about this market.

The GIS Market Heats Up

Back in the spring, GIS software market leader Esri published this article about how drones greatly benefit the work of professional surveyors and mappers.  Devon Humphrey states it clearly:

Due to the unique flight characteristics of UAVs, the imagery is sharper and offers some unique advantages. This means that the camera captures high ground resolution on the order of two to five centimeters. In addition, because there is a large amount of overlap in the imagery, digital photogrammetric processing results in 3D point clouds of similar resolution. Turnaround time is a few hours, instead of days, weeks, or months in the case of traditional delivery times. The user also controls the process rather than working with an outside vendor or being stuck using “day-old donuts,” generic imagery that doesn’t meet the temporal requirements.

He is not alone in that assessment. I think this market is heating up to become the second biggest commercial drone market behind aerial photography and cinema and ahead of precision agriculture. In a nutshell, I believe the GIS market will continue to grow rapidly because drones provide a technical advantage over incumbent aerial technology and incumbent technology costs more.

What should we expect in 2015?

A lot depends on the forthcoming small drone rule from the FAA.  If it looks at all like the exemptions granted this year (which have onerous restrictions), then U.S. commercial market growth will be seriously hampered.  This should be no surprise to anyone.  Much has been written on how government regulations hinder economic growth (for example here and here).  Still, in other countries with smarter regulations, expect these and other markets to continue to flourish and those over here will be looking at the success stories with envy.

You can find more insights from 2014 on these SlideShare presentations.  I would love to hear your thoughts about the commercial drone markets. Feel free to comment or write me at colin@droneanalyst.com.

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Why Drones Are the Future of the Internet of Things

What if you could talk to a drone?  No, seriously.  You can already talk to a locomotive, so why not talk to a drone?

For those of you following the technology, you already know that unmanned aircraft systems (a.k.a. drones) are finding their way into Internet of Things (IoT) implementations. IoT applications are typically composed of:

A sensor “at rest,” e.g., on a highway or a bridge or a thermostat that gathers input (like weather conditions or seismic activity) A connection (via the Internet) between the sensor and a back-end data collection infrastructure A back-end data collection infrastructure that’s commonly based in the cloud

So why do I claim that drones the future of IoT? For one, drone technology is evolving very rapidly. Drones are already beginning to efficiently replace the connected sensors at rest with one device that is:

deployable to different locations capable of carrying flexible payloads re-programmable in mission able to measure just about anything, anywhere

To illustrate the trend and these capabilities, I’ll highlight the developments of several companies. But first – so that we are all on the same page – let’s look at what I mean when I talk about drones.

A New Kind of Drone

All drones are not equal. Some like the Global Hawk are very complex systems that are connected to satellites and are only the purview of the military. Others like the Parrot A.R. Drone are mass-produced hobby aircraft that you can control with your mobile device.  But a class of drones in the middle combines the capabilities of both complex and mass-produced systems and is specifically designed for commercial purposes. These drones weight less than 55 lbs. and are classified by regulatory entities as small unmanned aircraft systems or sUAS.  We don’t see their ubiquitous use in the U.S. quite yet, but in countries like England, Australia, and France, you will find them operating in energy, mining, mapping, and surveying companies – and quite a few government agencies like those responsible for transportation and infrastructure.

Commercial drones are truly ‘unmanned aircraft systems’.  They are not just remote controlled aircraft.  They require many things in order to run, like avionics, ground control stations, communication systems, data collection and processing software, and of course GPS for geo-referencing. There’s more, but you get the idea. These are multifaceted complex vehicles whose mission is to fly sensors and collect data.

Commercial drones are also connected devices. So they are ‘things in motion’. Most are accessible or controllable over the Internet, and the data they collect is pushed to various cloud services. Some drones are beginning to carry on-board processors as well and are now part of the growing trend of fog computing devices.

Deploy a Fleet

So, if a commercial drone is a connected device, then shouldn’t you be able to ‘talk to a drone’?  And shouldn’t you be able to – from your smartphone in California –control a drone in, say, France?

You can.  And it’s because companies like DroneDeploy and U|g|CS have figured out how to make addressable drone management platforms that control multiple drones from anywhere on any device.  DroneDeploy does it by marrying a simple 4G telemetry device to a drone’s avionics.  This enables real-time data transmission, processing, and sharing. With this kind of hardware and software combination, you can plan missions (launch, go to point A, then point B, then to point C, etc.) in a browser, upload them to a drone anywhere, press start, and away it goes.  You could do that with a fleet and monitor them all in flight.

Flexible payloads

So one of things commercial users want is the ability to mount different sensors such as thermal imaging, UV or multispectral cameras, sniffers, and microphones to sUAS. PrecisionHawk figured out early on how to offer an array of sensors that are hot swappable and just snap into place. The cool thing about their aircraft is that the body itself is made of circuit boards and processors.  They’re hardened of course on the outside, but it’s an example of the innovation happening in the commercial drone industry.

Reprogrammable in mission

So, not only can you deploy these anywhere, but they are reprogrammable while on a mission.  Let’s say you wanted to create a 3D map for a construction project and you programmed it to run its mission but in the middle you noticed something odd (because you are looking through the camera in real-time on your laptop or smart-phone). With SenseFly’s drone software, you simply point to that area on the map, and you can:

divert the drone command it to perform another function in that area then resume and complete its first mission then come home and land

Measure just about anything

Every day, you can read about how measurement sensors are getting smaller and lighter. Such is the case with LiDAR, which allows you to capture minute details and measurements.  Because these units have been heavy up to now, there have been only three choices if you wanted these sensors to measure something:

They had to be stationary They could be roving (stationary on a truck or SUV) They could be carried on a manned aircraft

Stationary is the most accurate but lacks the significance of an aerial perspective.  You can get good results from aircraft, but not as good as from a drone.  With a drone can get close to the object – and as I mentioned they can be deployable on-demand. LiDAR manufacturers like Riegl and Velodyne get this, and we now see offered in the GIS market new high-performance, remotely piloted aircraft system for unmanned laser scanning, like those from Phoenix Aerial Systems and Sabre Systems. These airborne platforms provide full mechanical and electrical integration of sensor system components into aircraft fuselage.

LiDAR data models are huge, but as more low-cost in-memory computing becomes available, service providers are storing the models in the cloud and then updating them to reveal changes over time. Of course, it’s the analytics on top of that that provides the real insights – insights like structural integrity and predictive failures.  Soon, multiple infrastructure sensors – like those found on bridges and highways – will be obsolete.

What’s next?

We are only beginning to find out how drones can be used to replace multiple sensors, and hopefully I’ve successfully convinced you of how drones play into the future of the Internet of Things.  Surely this technology will push the bounds of how we can measure and analyze ‘things at rest’ and ‘things in motion’ and how they can interact with both of them.

You can find a companion SlideShare presentation to this post here.  I would love to hear your thoughts on this topic. Feel free to comment or write me at colin@droneanalyst.com.

Image credit: Shutterstock

The post Why Drones Are the Future of the Internet of Things appeared first on Drone Analyst.

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