Current State of the Drone Industry - Skylogic Research

1Copyright 2017 Skylogic Research, LLC |
THE CURRENT STATE
OF THE DRONE
INDUSTRY
DroneDeploy Day
October 27, 2017
Colin Snow, MBA
CEO and Founder

Topics What industries are paving the way for drone adoption?
Who’s leading the drone market?
What role does software have in this space?

What is the real number?
$2B - $127B

The pundit industrial
complex
We are currently tracking 72
different forecasts!
Most reports sell between
$2,000 and $6,000
Source: Skylogic Research

The pundit industrial
complex
"[X Consulting Firm] believes that [Y emerging technology] will
eventually reach a market size of [$Z billion]."
Image: CB Insights
How it’s done

Setting realistic industry
expectations
Our approach:
1. Start with actual market data
(sales, user surveys, etc.)
2. Analyze it
3. Build a realistic model of
industry growth
THE FAA
Image: The Marketoonist

Growth issues we consider 1. More consumer drones are being used for commercial work than ever
before.
2. Drone sales is not equal to fleet numbers and there is a huge gap
between actual commercial use and compliance with FAA regulations.
3. Part 107 has created low risk barrier to entry and this has created a
current glut of certified sUAS remote pilots.
4. Film / photo / video is still the #1 largest commercial use.
5. Most drone-based service providers are very small and do not make
enough money to sustain even a part-time venture.
6. Business / industry adoption growing, but it’s mixed because of factors
such as:
• Digitization varies by industry
• Business risk aversion
• Concerns over invasion of privacy
• Reluctance to share too much information about successes

General industry adoption
hurdles
Basic public concerns:
• Safety
• Security
• Privacy
• Public Nuisance

Role of software
Mission
Planning
•Site selection
•Airspace
•Flight path
•Overlap
•Capture
parameters
Data
Acquisition
•Aircraft /
Platforms
•Sensors
•Computer
vision
•Embedded AI
Data
Processing
•On-board
•Cloud-based
•Post-
processing
•Live
streaming
•Storage
•Images/
video
•Photo-
grammetry
•3D models
•NDVI/ index
maps
•Machine
learning/AI
•Mobile
•PC
•Real-time data
•APIs
Data
Visualization
Data
Presentation
Operations
•Flight logging
•Fleet
management
•SOPs
•Safety checks
•Pre-flight / post-
flight
maintenance
•Insurance
..in the drone industry will need to support a standardized workflow
and the various operation types with built-in functionality or an
ecosystem of partnerships.
Operation Types:
Standardized Workflow
Day Night Over People BVLOS Source:: Frost and Sullivan and Skylogic Research

1.7
6.5
4.1
2.9
1.1
12
7.0
3.8
1.7
0
1
2
3
4
5
0 1 2 3 4 5
Agriculture
Construction
Insurance
Mining and Aggregates
Oil & Gas
Public Infrastructure
Railroads
Telecommunications
Utilities
Estimated Market
Size in $B
Market size and potential There is a general lack of consensus on how to calculate the total market
demand - aka Total Available Market (TAM) - for drone based product and
services.
Source:: Skylogic Research
Use Case Maturity
RelativeGrowthRate
Relative to the others –
not actual growth rate
Not shown: Film / Photo / Video

Latest research Data collected for our latest study comes from a survey we conducted over the
web in July and August 2017 and interviews performed with business users in
Q1 and Q2 of 2017.
We evaluate four distinct sectors of the market:
1. Drone Purchases
2. Service Providers
3. Business Users
4. Software Services
Our online survey garnered 2,666 respondents representing over 60 industries
worldwide.
Large sample size means
the statistics are reliable
• Confidence level 99%
• Margin of error ±2.5%

Purchases
72%
25%
68%
buy for
professional /
commercial use
59% is for film, photo,
or video use
purchase direct from
the manufacturer
Amazon was #2 at 17%.
purchased DJI
drones
vs. all other brands
Individuals or organizations that purchased a drone in the past 12 months
We asked detailed questions
about:
• Type of aircraft
• Brand purchased
• Price
• Place of purchase
• Intended use
• More..

Current market leader
DJI is the clear market share leader in drone aircraft sales, industrial use,
and almost every software category.
More DJI aircraft are used by service providers and business users than any
other brand. They also have more partnerships supporting the standardized
ecosystem workflow than any other.
Our data shows DJI is the dominant brand for drone aircraft purchases, with
a 72% global market share across all price points. It’s even higher share
(87%) of the core $1,000–$2,000 price segment.
In North America (U.S. and Canada), DJI’s overall market share is 62%.
Drone Brand Market Share

Top use cases
Commercial Drone Use by Vertical
1. Film / Photo /Video (combo) 42%
2. Surveying and terrain mapping 11%
3. Asset and infrastructure inspection
and monitoring 7%
4. Public safety / first responders 5%
5. Agriculture / farming 5%
Top 5 Business Case Uses

Service providers Our survey finds only about 8% of service providers make more than $100,000.
1 Surveying / Mapping / GIS
2 Aerial Photography and/or Video
3 Utilities Infrastructure Inspection or Monitoring
4 Construction
5 Agriculture / Farming Services
6 Consulting
7 Cinematography / Movie / TV
8 Oil & Gas Facilities Inspection
9 Mining or Aggregate Operations
10 Real Estate (commercial and/or residential)
Top 10 Drone Services Making Over $100K/Year

Business users (industry) We define business users as those individuals or companies that use or
purchase drone-based imaging or sensing services.
Our confidence level for this portion of the survey is 95% ±4%.
Who performs your drone-based services?
We asked detailed questions about:
• Annual revenue
• Services used or purchased
• Controlling department
• Number of aviation authority,
licensed small UAS / UAV remote
pilots employed
• Number of projects performed per
month
• Method of drone purchase

Software services We define software services as the software apps or online services to log
flights, manage drone operations, plan missions, or process data from
drones.
Our confidence level for this portion of the survey is 99% ±3%.
We asked detailed questions about the software apps or online services
used to perform:
1. Flight logging and operation management
2. Automated mission planning
3. Data, image, video processing

Software services
Drone Data / Image / Video Processing Software Market Share
For data / image / video processing the
top 3 vendors (53%) do film / photo /
video.
All others (the next 47%) do mapping
and photogrammetry

Future of drone software What’s on the horizon?
Imaging
• RGB, thermal imaging, orthomosaic, radiometric data combo
Cloud-based artificial intelligence (AI)
• Machine learning (deep learning, predictive analytics)
Edge-based AI
• Vision (image recognition, machine vision)
Asset management systems
• Documentation, tracking, and GIS data integration
Unmanned Traffic Management (UTM)
• Drone ID
• Performance based navigation (standards based)
Image: Drone Infrared Imaging

Research report AVAILABLE NOW
Price:
$1,450 Single User License
$2,250 Enterprise License
PURCHASE HERE: http://droneanalyst.com/research/research-studies/2017-
drone-market-sector-report/
10keyinsights
88pages
40figures
9datatables

Questions? Additionalslides:
About
Disclaimer

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 companies 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 90,000
business executives and innovators through social media and media partnerships, allows us to
deliver a high-value, low-risk method for achieving optimal understanding.
Drone Analyst® is the registered trademark and brand name and trademark of Skylogic
Research, LLC
Learn more:
Web http://droneanalyst.com
Twitter @droneanalyst
Email colin@droneanalyst.com

©2017SkylogicResearch,LLC.
Allrightsreserved.
This publication is not approved for public distribution under the terms of agreement with DroneDeploy.
Drone Analyst® products and services mentioned herein as well as their respective logos are trademarks of
Skylogic Research, LLC.
These materials are provided by Skylogic Research are for informational purposes only, without
representation or warranty of any kind, and Skylogic Research shall not be liable for errors or omissions with
respect to the materials.
In particular, Skylogic Research has no obligation to pursue any course of business outlined in this document
or any related presentation, or to develop or release any functionality mentioned therein. This document, or
any related presentation, and Skylogic Research strategy and possible future developments, products,
and/or research directions are all subject to change and may be changed by Skylogic Research at any time
for any reason without notice. The information in this document is not a commitment, promise, or legal
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Current State of the Drone Industry - Skylogic Research

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