Commercial Drone Market Sector Forecasts

1|Copyright ©2016 Skylogic Research, LLC
MARKET SECTOR
FORECAST FROM
UAV INSIDER:
WHICHAREGROWINGAND
WHICHAREN’TPANNING
OUT

“It’s tough to make predictions, especially about the future.”
– attributed to Yogi Berra

Topics Forecasts: diversity, hype, rumor, and wonk
Investor sentiment
Outlook for sectors

Forecasts: diversity, hype,
rumor, and wonk
$2B - $127B

Diversity
We are currently tracking
50 different forecasts!
Most reports sell between
$2,000 and $6,000

Diversity
Source: PwC Source: Goldman Sachs
Most drone market forecasts
overlook the largest commercial
sector: Film/Photo/Video
a TAM is not a
forecast

Hype
“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.”

Rumor Q. What was the impact of FAA’s consumer drone
registration on holiday sales?
A. NPD Group says some slippage at first, but in the
end sales were up YoY

Wonk
5%
1%
1%
1%
2%
4%
7%
18%
24%
38%
5%
1%
2%
2%
4%
5%
11%
19%
26%
26%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Other (DIY, used, etc.)
Action sports / outdoor retailer
General merchandise big box retailer
Vertical market reseller
General camera / audio / video retailer
Big Box electronics retailer
General hobby store
Amazon or eBay
Directly from manufacturer
Dedicated drone dealer/distributor
Past Future
n = 640
Source: Skylogic Research
Qs. Where did you buy / where will you buy your next drone?
NPD data misses
most of this

Wonk “On average, exemptions list two unmanned aircraft types that will be
used in operations. The most popular unmanned aircraft maker is DJI,
which accounts for two out of three drones listed across all
exemptions.”
Center for the Study of the Drone at Bard College: Analysis of U.S. Drone Exemptions 2014-2015
Many – including DJI – believe
this affirms their “70% market
share” claim.
But this is not unit market
share. It is only what is listed
on the application as what
they “might use” - not what
they actually own or even will
use.
“Echo Chamber”
Image: DJI

Commercial UAS aircraft
(N-number)
1805
197
134 127
0
200
400
600
800
1000
1200
1400
1600
1800
2000
DJI 3DRobotics Precisionhawk AscTech
DJI = 46.3% Overall
As of 3/31/2016 - Source: sUAS News
See more here:

Most popular brands Q. What was the brand of your last drone purchase?
50%
7%
4%
3%
3%
2%
2%
2%
2%
4%
20%
DJI
3D Robotics
Yuneec
Blade
Parrot
Event 38
Hubsan
FreeFly Systems
Syma
Custom
Others (<2%)
n = 647
DJI’s overall market
share in North America is
about 50 percent—not 70
percent as popularly
described.
insight
SEVEN

1.8 1.2
7
55
107
450
234
1
2
2
13
29
74
31
-5
5
15
25
35
45
55
65
75
0
50
100
150
200
250
300
350
400
450
500
2010 2011 2012 2013 2014 2015 Q3 2016
Dollars ($)M Deals
Investor sentiment
Source: CB Insights
Dear John Drone,
I’ve found somebody else.
Signed,
VC

Outlook for
sectors

U.S. Drone Sales Revenue
Forecast (in 000’s) – all
price points
$1,526,004
$2,334,786
$2,918,483
152%
113%
87%
0%
20%
40%
60%
80%
100%
120%
140%
160%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
2016 2017 2018
Projected CAGR Source: Skylogic Research
$2.9B in 2018

Drone purchases – price
points
Q. What was the price of your last drone purchase?
17%
13%
34%
18%
9%
7%
2%
1%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Less than $500
$500 - $999
$1,000 - $1,999
$2,000 - $3,999
$4,000 - $7,499
$7,500 - $34,999
$35,000 - $99,999
More than $100,000
n = 650
More than half of all
buyers purchase drones
costing between $1,000
and $4,000
insight
SEVEN

Drone purchases - usage
Descriptor Price Range
Hobby
Use
Commercial or
Government
Use
Consumer
Less than $500 73% 27%
$500 - $999 65% 35%
Prosumer $1,000 - $1,999 39% 61%
Professional
$2,000 - $3,999 11% 89%
$4,000 - $7,499 3% 97%
$7,500 - $34,999 0% 100%
$35,000 - $99,999 0% 100%
More than $100,000 0% 100%
“Prosumer” category
is narrow. ASP =
$1400
insight
FIVE
Most drones (85%)
costing more than
$2,000 are purchased
for professional use.
Key insight
FOUR

User survey Q. What is the primary intended use of your drone purchase?
Film/Photo/Video
accounts for 43% of
intended commercial use
and constitutes the
largest commercial
market sector
insight
FOUR
37%
16%
13%
7%
6%
6%
4%
3%
8%
Commercial photo / video
Survey and mapping
Inspection / monitoring
Precision agriculture
Academic research
Cinematography
First responder
Testing and R & D
Other

Current
environment
Uncertain
future
Mapping
Photo / Video
Structural
Inspection
Sports
Real Estate
Cinematography
Search and
Rescue
Surveying
First
Responders
Precision
Agriculture
Package
Delivery
Linear
Inspection (rail,
oil, power)
Border Patrol
Fish and
Game
VLOS BVLOS
Source: Gryphon Sensors and Skylogic Research
Sector challenges
Construction

Sector Scorecard
= Few
= Several
= Many
Precision
Agriculture
CivilInfrastructureConstruction
Energy
&
UtilitiesFilm
/Photo
/VideoM
ining&
Aggregates
PublicSafety
&
1stResponders
Surveying
&
M
apping
OVERALL SECTOR OUTLOOK
Challenges:
Access permissions
BVLOS operations
Data capture resolution and accuracy
Data governance and chain of custody
Data processing bottleneck
Incumbent technology and players
Intellectual property
Nighttime flights
Occlusions and obstacles
Privacy rights
Worksite safety
SOPs
Standards and practices
State and local restrictions
Terrain and object height autonomy
Workflow and legacy software integration
*VRT adoption rate
OUTLOOK = drone usage and micro-economic benefit

Find out more - articles and
free research reports
Commercial UAV News
http://www.expouav.com/news/
Skylogic Research
http://droneanalyst.com/research/

Questions?

About Skylogic Research, LLC is a research, content, and advisory services
firm supporting all participants in the commercial unmanned aircraft
systems (UAS) industry.
We help you make critical investment decisions with confidence by providing research-
based insights on the commercial drone markets.
Our focus is on the needs of three constituents:
• Manufacturers, suppliers, and business service providers – who need research and insight
into buyer needs
• Buyers of UAS technology and services – to help inform their acquisition decisions
• Investors – who need to distinguish technical and market viability
This focus, plus research as a foundation and reach into a community of more than 80,000
business executives and innovators through social media and media partnerships, allows Drone
Analyst to deliver a high-value, low-risk method for achieving optimal understanding.
Drone Analyst is the brand name and trademark of Skylogic Research, LLC
Learn more:
Web http://droneanalyst.com
Twitter @droneanalyst
Email colin@droneanalyst.com

©2016SkylogicResearch,LLC.
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