Commercial Drone Market Forecasts Diversity and Hype

This post analyzes the latest commercial drone forecasts and debunks some prevalent myths and hype. 

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Have you noticed the growing number of market forecasts for the commercial drones industry?  I have.  Not a week goes by that a new one doesn’t hit my radar.  I’m currently tracking about 15.  Each in one way or another delivers growth projections for the drone or unmanned aerial system (UAS) sector that are nothing short of phenomenal.  But are they, really?

In this post, I’m going to share three secrets to help you understand forecasts better, unpack the hype and diversity of market reports, and hopefully leave you skilled enough to ‘cry foul’ when you see a new report that is, well, questionable. At the end, I’ll give you my personal take on the most popular forecast reports.

THREE SECRETS

Read more here: http://droneanalyst.com/2015/06/04/diversity-and-hype-in-commercial...

Views: 795

Comment by Olivier on June 5, 2015 at 10:31am

Yet another stellar post. Dense with information, cuts to the chase, fiercely independent and unafraid to tackle status quos. Thanks for sharing!

Comment by Colin Snow on June 5, 2015 at 10:44am

Thanks Olivier. Glad you liked it.

Comment by Gerard Toonstra on June 5, 2015 at 11:05am

I disagree with the statement that regulations raise uncertainty. In fact, I think the opposite is true. In the few weeks after FAA regulations were announced, a number of new investments into big companies were also announced: 3DR, DJI and dronedeploy for example.

Regulations seemed to have driven these investments. Regulations also enable the insurance industry to hop onboard. There's now a clearer framework to establish accountability. What's still lacking there are failure rates and expected damages to third parties.

Comment by Rob_Lefebvre on June 5, 2015 at 11:35am

I agree Gerard.  I don't see regulation stopping the growth of drones any more than a sandbar stops a tsunami.  It may slow it down, and take a little of the edge off, but can't stop it.

Governments will NOT be able to stop UAV's now.  It's too big, too important of a technology, too revolutionary.  Governments can try and stand in the way, but it's coming. 

Comment by Colin Snow on June 5, 2015 at 11:39am

Thanks Gerard. You're right in one sense, but regulations don't 'drive' investment they permit it.

Regulation uncertainty with things like BVLOS, what you can do / can't do in certain airspace classes, state and local regulations that bind where and how drones fly do foster uncertainty for our industry.

Here's a good paper that looks at the topic of the impact of regulation on innovation across several industries:  https://www.iom.edu/~/media/Files/Report%20Files/2011/Health-IT/Com...

Additionally, the insurance industry looks mostly at risk and capacity - not regulation. There is a good presentation on UAS insurance here: http://www.slideshare.net/sUASNews/terry-miller-transport-risk

Cheers - Colin

Comment by Olivier on June 5, 2015 at 11:58am

Gerard, only proposed  regulations were announced. We don’t know as of yet what US final regulations will be, especially when it comes to BVLOS where the picture appears fairly bleak at least at first blush. Given this, how accurate can commercial market predictions be when manufacturers and drone businesses don’t  know what will or will not be allowed?

Agree that once we get a better picture predictions will stand a better chance. And the proposed regulations, by at least providing some hints,  definitely helped in that regard. Yet there’s still considerable uncertainty.

Btw the insurance industry  hasn’t been waiting. It’s quite easy to get insurance coverage regardless of the current legal situation. Many commercial drone filmakers have it,  for instance,  wether they hold 333 exemptions or not. E.g.  policies issued by Transport Risk Management.


Moderator
Comment by Gary Mortimer on June 5, 2015 at 12:15pm

Have you noticed sUAS News hardly ever posts these forecasts unless they are so outrageous they make me laugh. Then I post them knowing our readers can see the flaws. 

The main thing that interests me with the US predictions is they make wild predictions based on markets that have already failed in the rest of the world. Its like 2005 in Europe. There are markets that work but they are barely on the US radar.

Platforms and how they fly are meaningless. (They were very important when we couldn't keep them upright or head off in a meaningful direction)

Data gathered and how quickly it is turned into an actionable product is where the money is now.

You are bob on to flag this up Colin. Love the Will Rogers quote. 

Comment by Gerard Toonstra on June 5, 2015 at 12:19pm

Colin,

Indeed, regulations don't drive anything. Maybe the statement shouldn't be "regulations raise uncertainty", but "lack of regulations raises uncertainty"?

Comment by F1P on June 6, 2015 at 6:18am

Most valuable trends is "drone industry trends" analisis =)

Comment by Nikola Rabchevsky on June 6, 2015 at 7:37am

I was in the 3D animation industry back in the golden age of the mid 1990s.  Back then, there was a supposed industry guru who published this state and future of the industry report that said 3D was going to be a multi-billion dollar industry.  Mind you, this was back in the 90s when billion was a rarely used number on an infant industry and also before the dot-com craze.  Ultimately, 3D software and hardware companies poured gobs of money into developing their ideas.  The profits never materialized and most of those companies are gone or were acquired. Hype (translation: B.S.) was also the downfall of the dot-coms.

The secret to success is to make the product compelling.  Me-too products won't last (just look at the bunchteen el cheapo quadcopters you can find in Fry's).  Continual innovation is necessary.  That and making a quality product.  Don't let the media drive the company.

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