Market intelligence company Interact Analysis predicts that global commercial unmanned aerial vehicle (UAV) revenues will soar to $15bn by 2022. Growth will be largely driven by two key markets U.S. and China.
UAVs or drones, which are currently best known for their use by the military are finding their way into countless commercial applications the research found. The industry is predicted to grow on average by 50% per year over the next five years, reaching $15bn in 2022, up from just $1.3bn in 2016.
“The U.S. market is undergoing rapid transformation following the release of the FAA’s Part 107 regulations, and will grow from less than $500m last year to more than $4bn in 2022,” said Ash Sharma, research director at Interact Analysis and co-author of the report. “China and the United States will propel global growth given their huge commercial end-markets such as inspection, surveying and energy; however, growth will come from around the entire world and all 15 markets we studied are poised for massive growth.”
This prediction is derived from The Commercial UAV Market – 2017 Report.
Although UAV hardware will remain a substantial market, the report found that UAV services will be the biggest driver of revenue growth over the next five years. The report predicts that revenues generated by UAV services will exceed $8bn by 2022 – almost double the revenues coming from the UAV hardware itself.
“Due to the immaturity of the downstream market – e.g. service providers capable of effectively employing UAVs – UAV vendors are having to work directly with end-customers and provide services to them. However, as the industry matures and third-party service providers begin using UAVs as a standard “tool”, we forecast substantial revenues to come from this route-to-market,” said Alastair Hayfield, research director at Interact Analysis and co-author of the report.
The Building & Infrastructure vertical – which includes building inspection, construction, mining and transportation – is forecast to be the largest by 2022 and a major driver of UAV industry growth. Building inspection which includes the inspection and surveying of infrastructure such as cell towers, bridges and buildings is predicted to become the single largest application in 2022 and worth close to $2.5bn that year. Energy – which includes the inspection of oil and gas pipelines and oil rigs and refineries, power lines and renewable energy assets – is also poised for impressive growth as customers in this capital-intense vertical seek to deploy UAVs for inspection of their assets to lower operating costs and reduce risk.
Agriculture which has been tipped to lead industry growth by other industry reports was not viewed quite as positively by this report. Although fast growth is still predicted for UAVs in agriculture, it will remain one of the smaller verticals according to the report. Although UAVs offer a number of advantages in agriculture and will see strong uptake, barriers such as competing solutions (such as satellite imagery), tight margins and price pressure, industry fragmentation and an inertia to adopt new technology will temper demand.
Software and analytics will also become an increasingly important part of this industry as the vast amount of data harvested by the UAVs need to be properly handled, interpreted and analyzed to make it actionable. The report found that software and analytics revenues will grow from less than $50m in 2016 to close to $2bn in 2022. Software and analytics revenues will grow substantially quicker than those from hardware due to the nature of software subscription sales and renewals.