The drones market is anticipated to register a CAGR of 15.37% during the forecast period to reach USD 47.76 billion by 2025.
- For several years, the drones market had been in the nascent phase, facing a lack of adoption in the commercial sector. Although they were initially viewed as military devices, drones have established a significant presence in the commercial sector over the past five years.
- Over the years, with hundreds of exemptions from governing bodies, like FAA and EASA, the demand for drones has emerged from various industries, like infrastructure, agriculture, transport, entertainment, security, and insurance. Hence, enterprise drones are expected to register higher growth during the forecast period, as compared to consumer drones.
- Advancements in drone technologies have allowed manufacturers to produce a wide range of models in different sizes, weights, and shapes, which can carry different sensor payloads, making them favorable across a broad application base.
- However, the lack of regulations and restrictions on the flying of drones beyond the visual line of sight in several countries across the world has restrained the market to grow up to its full potential. Other factors, like security and safety concerns and scarcity of trained pilots, are also anticipated to challenge the growth of the drones market to a certain extent.
Key Market Trends
Construction Segment Held the Largest Market Share in 2019
In 2019, the construction segment held the largest market share. The proliferation of drones has revolutionized the operational processes in the construction industry. Drones are rapidly replacing the traditional land surveillance methods, as they offer a significant reduction in labor and time to capture the necessary data while eliminating the scope of human error. Drones are being increasingly utilized to perform the visual inspection of the high-risk areas of a construction site. The efficiency of on-site communication and management is also bolstered by the ability to collect real-time data from drones. Drones also help engineers and surveyors carry out the inspection of high-rise structures and visualize the project progress through aerial shots. Additionally, they provide site managers with an overview of potential issues and facilitate key decision-making aspects to streamline the operations at a construction site. The increasing demand has encouraged drone manufacturers to manufacture more drones, specifically for the construction industry. For instance, in October 2018, DJI launched its Phantom 4 RTK drone, for surveying and mapping, at the European Drone Summit in Frankfurt, Germany. The drones are designed for ensuring significant improvement in surveying, mapping, and inspection. The German construction giant, STRABAG, publicly showed its interest toward Phantom 4 RTK for collecting aerial data for 3D modeling, in order to reduce costs and improve operational efficiencies. Also, in April 2018, DroneDeploy Inc. launched its construction solution that allows users to intuitively plan photo flights, automatically capture corner images, immediately create a visual timeline of a job site, and generate a replicable weekly progress report. Such developments helped the market witness a higher demand from the construction segment.
Asia-Pacific to Experience the Highest Growth During the Forecast Period
The drones market in Asia-Pacific is anticipated to witness the highest growth during the forecast period. The recent changes in drone regulations in several countries across the region are expected to support the growth of the market. China became the global hub for drone manufacturing in the past six years. About 70% of the global civilian drone market is supported by China, which had about 1,200 drone manufacturers in the beginning of 2019 (up from 130 manufacturers in 2013). The Chinese government is providing various subsidy schemes and other favorable domestic policies for drone purchases to promote the adoption of drones in various industrial sectors. The growing application areas of drones are simultaneously propelling the demand for these UAVs in China. Hobbyist drones had dominated the Chinese drones market in the past. However, the increasing demand for drones for monitoring, inspection, surveying, and surveillance applications in the construction, agriculture, infrastructure, energy, telecommunications, mining, and insurance industries is propelling the growth of the commercial segment of the market. Moreover, Japan’s UAV market segments (consumer, enterprise, and military) are expected to witness rapid growth, in terms of technology and procurement. The Japanese government recently implemented new regulations for drone manufacturers and users, which may support the Japanese drones market in the future. The government took initiatives to improve the country’s commercial drone industry and reach its goal of enabling drone delivery in Tokyo by 2020. The government announced its plans to establish a streamlined registry system by 2022, in order to offer more opportunities for drones. The consumer market for Japanese drones is also witnessing growth. The enterprise (commercial) segment is expected to witness higher levels of growth in the years to come. The security firms engaged in surveillance activities and construction companies conducting on-site inspections are expected to increase their usage of drones. In addition, Australia is a major industry hub in Asia-Pacific, which is witnessing the rising importance of BVLOS testing. As of July 2019, there were more than 1,200 drone operators in Australia. These operators are rapidly developing technologies and services to support the large drone ecosystem. The supportive drone regulations in Australia introduced by the Civil Aviation Safety Authority (CASA), in support of many domestic and international players, is helping the penetration of drones into many applications. Hence, the market in Asia-Pacific is expected to grow at a rapid pace during the forecast period.
Some of the prominent players in the market are SZ DJI Technology Co. Ltd (DJI), The Boeing Company (Insitu), Terra Drone Corporation, Intel Corporation, BirdsEyeView Aerobotics, Parrot Drones SAS, Yuneec, and Delair SAS. The market comprises a handful of established players, which enjoy a strong foothold in the market. SZ DJI Technology Co. Ltd (DJI) is one such company, which controls a significant market share. However, there are many small companies and startups that entered the market in the past few years, due to the high profitability in the market. Companies are competing to gain market shares and are developing advanced technology-integrated drone hardware and software solutions that reduce human effort in applications, such as mining, construction, and aerial mapping. Additionally, the entry of companies, like The Boeing Company, Alphabet, and Intel, into the commercial sector of drones is expected to make the market fragmented over the coming years.
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