The Market

Commercial UAV Sales will be Worth $3.4 Billion by the End of 2016

In Valour Consultancy’s recently published study, “The Future of Commercial and Industrial UAVs”, sales of unmanned aerial vehicles (UAVs) used for commercial and enterprise purposes will be worth $3.4 billion by the end of 2016. The popular hobbyist market is become a “must-have” tool for a number of business use cases or service provider solutions, so much so, that commercial UAV unit sales are expected to increase by 128% in 2016 from 2015.

People are well aware of a number of consumer aerial drone manufacturers, such as DJI, Parrot, Yuneec or 3DRobotics, and these types of aerial systems and the instrumentation they carry, are becoming a critical tool for a number of professions and companies. The commercial UAV market is tremendously hard to quantify, with a large number of prosumer users operating in the grey areas of regulation. However, with the introduction of mandatory licensing and certification from aviation and regulatory bodies around the world, it has become clearer to discriminate between the real movers and shakers in the market from the opportunists.

Thus far, the FAA have licensed approximately 4,000 companies and organisations with 333 authorisation UAS licenses, and other related bodies around the world are counting up in the four figure area. Considering the majority of these regulatory introductions was only brought into force late last year, we can clearly see there is a strong demand for drone use and, most likely, a bundle of innovation happening behind closed doors.

Valour Consultancy estimates the high-end hobbyist/prosumer market ($750-$1,500) made up the bulk of the market, more than a million units sold in 2015. Professional multi-rotors made up the second largest segment of the market in 2015, with more than 65,000 units sold. Fixed-wing UAV sales were far behind, with only 5,200 units in the same year. Nevertheless, sales of this type of UAV will grow rapidly in the coming years, particularly for agriculture and environmental research projects. By 2020, we anticipate more than nearly 90,000 commercial fixed-wing UAVs will be in active deployment for commercial use.

What does this mean from a financial perspective? Attempting to qualify UAV unit sales is fine. But what will all these drone service providers, consultants, or end-user companies generate from gaining extra mapping, surveying and searching capabilities, or will they simply use these tools to save money by not needing other services such as hiring helicopters or employing teams of surveyors?

Collating drone service provider monthly subscription fees has provided a useful indicator from varying applications and is also quite fascinating. Furthermore, the variety in drone contractor day rates in different applications is equally enthralling. Calculating the number of days these contractor work in a year or a month makes the matter rather complex too.

After undertaking these calculations, Valour Consultancy estimates the average revenue per month for a commercial drone is approximately $1,572 in 2015. In the oil and gas sector, the average revenue month for a drone is significantly higher; in the media and entertainment sector, much lower. We estimate the total market for commercial drone service revenues amounted to a $3.0 billion global market already. UAV service revenues are projected to increase by almost a factor of ten in the next five years.

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