This post also appears in The Market section of sUAS News.

As the Federal Aviation Administration prepares new guidelines for the use of unmanned aerial systems (UAS) in the U.S. national airspace, startups and aeronautic mainstays are chomping at the bit to start selling drones for commercial ventures, from filming to crop scouting to inspecting oil pipelines.  Some market forecasts like this one from Markets and Markets and this one from Business Insider expect the size of the commercial market for sUAS to grow significantly over the next decade. I believe they are right, but what is up for grabs is, Who will get the lion’s share of the market?  Will it be the startups like Airware and PrecisionHawk or the defense suppliers like Lockheed-Martin Procerus Technologies and AeroVironment?

Read more here:  http://droneanalyst.com/2014/09/25/commercial-uas-market-opportunities/

Over the course of three days in August, I along with more than 670 participants at the Ohio UAS Conference 2014 in Dayton, OH, witnessed a large number of government and aerospace company attendees interested in taking drones into commercial markets.  From the dozens of presentations and interactions I had with academics, military contractors, aircraft manufacturers, parts suppliers and many others at the event, it’s clear that government and aerospace have jumped on the drones-for-commercial-use bandwagon.  But, for a number of reasons, this group’s aircraft aren’t going commercial just yet.

To be clear, the Ohio show was about showcasing proof of concepts and building partnerships – not flying and getting customers. This stands in stark contrast to the Precision Aerial Ag Show I attended earlier this summer, where many vendors demoed their aircraft and showcased their customers and established relationships with local service providers.

Why the dissimilarity?  Part of the difference is in approaches to FAA regulations.  The aerospace and military contractors play it safe by following all the FAA guidelines — regardless of which airspace they fly or test in.  But commercial vendors, whose aircraft and commercial applications are intended only in Class G uncontrolled airspace approach FAA guidelines as just that—guidelines. I wrote about these “radical opposites” in The Business of Drones: A Tale of Two Cities.

What I found interesting about the Ohio show is that it revealed evidence of a closing gap between commercial and public sector approaches to drones. I see a trend in which aerospace companies are beginning to adopt model aircraft and consumer technology. Let me explain by telling the story of three vendors I saw.

Read more here: http://droneanalyst.com/2014/09/04/lockheed-drones-meets-gopro-ohio-uas-conference/

In this post I discuss the prospects of consumer product delivery by drones and ask: How much are you willing to pay for the service? There is a survey at the end so you we all can see what the trend is.  I'll post the results later.  PS - this is not sponsored by Amazon.

I love the look of the Tesla Model S, but I’d never get one. Somehow, the opportunity to pay $100K to drive only 300 miles before spending 4 to 9 hours recharging does not appeal to me. I also love the idea of Amazon’s drone delivery initiative Prime Air.  But, like the Tesla, the opportunity to pay a lot of money for drone delivery of the latest camera just doesn’t make sense.

Amazon has successfully painted a picture of a future in which its drones push merchandise from its warehouses to nearby consumers in 30 minutes. But to qualify for Prime Air, the order must be less than five pounds, which, according to Bezos, includes 86% of the packages Amazon currently sells. The order must also be small enough to fit in the cargo box that the craft will carry, and the delivery location must be within a 10-mile radius of a participating Amazon order fulfillment center.

What is less than 5 lbs.?  Here’s some examples from some recent online shopping trends research:

• Consumer electronics
• Books
• Clothing

...read more here:  http://droneanalyst.com/2014/08/24/drone-delivery-how-much/

Take the three question survey here: https://www.surveymonkey.com/s/drone-delivery

Last week my colleague Mitch Solomon and I were privileged to be in the company of more than one thousand farmers in rural Decatur, IL, for the two-day Precision Aerial Agriculture Show 2014 (PAAS 2014).  Mitch covers five key takeaways from the show in his post about the event – including the most salient one: There is no killer drone app for farmers – rather, drones are a tool with many apps and high ROI.  In this post, I’ll give an accounting and analysis of the players in attendance that are supporting the market for drones in agriculture. Some were present, others were mentioned but weren’t present, and still others were surprisingly absent on all counts.

Bottom line

Regardless of which vendors attended or exhibited, here’s what you need to know with regard to the drones vendors serving or intending to serve the agriculture market:

1. Most of the companies that serve this market are small businesses. It is clear they are working hard to learn firsthand what farmers want from small drones and in doing so are establishing networks of distributors and service providers that will lock other players out of the market.
2. Manufacturers of small drones for precision agriculture are consolidating around DJI and 3DRobotics for their flight control and mission planning software – mainly because of functional maturity and low-cost.
3. The large aerospace companies and Department of Defense (DoD) contract vendors do not have a presence in this market. Even though some have participated in agricultural academic studies, as a whole their products are unknown in the farming community. These vendors simply have not established the necessary relationships with growers, dealers, coops, agronomists, and local service providers.  As a result, it’s probably too late for them to capture any significant U.S. agriculture market share.

Present and Accounted For

AgEagle – AgEagle had the enviable booth position just inside the show floor, which made it hard to ignore. Its purpose-built Ritewing Zephyr II fixed-wing flyer with uTHERE flight controller and Canon S100 camera goes for about US $12,500.  The system comes with a catapult to get it in the air fast, where it will fly at 40 mph and cover approximately 600 acres in 30 minutes. A cloud-based aerial agronomic imagery solution is offered in partnership with MyAgCentral, a division of DN2K. This solution has a fully integrated workflow function that streamlines the process of flying fields and capturing, storing, processing, viewing, and sharing aerial images. For instance, ‘shape files’ can be imported into SMSTM Software for use with variable rate applicators. Information on that partnership can be found here.

Read more here: http://droneanalyst.com/2014/07/16/drone-tech-winners-and-losers-at-the-precision-aerial-ag-conference-2014/

This is an excerpt a post I developed in conjunction with Mitch Solomon of Aironovo.

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Since its publication in early 2013, AUVSI’s The Economic Impact of Unmanned Aircraft Systems Integration in the United States has become the gold standard forecast for the commercial drone market, garnering media attention typically reserved for celebrity weddings and babies born to royalty.  Its primary forecast is that the UAS market will reach a whopping $1.14 billion in the first year after the FAA issues favorable regulations and that the precision agriculture market will “dwarf all others.”

The accuracy of these predictions is enormously important. A lot of people – tens of thousands, if not more – have been relying upon them for big decisions like, “Should I leave my job to start a drone company?” or “Which market should my company pursue?”  But commercial drones are not just cocktail party conversation–they are increasingly driving the flow of capital and labor, and impacting many lives in the process.

Inquiring Minds Want to Know

Recently, however, a growing chorus of industry observers has started to ask questions about the reliability of AUVSI’s findings. This post at Drone Analyst is a good example. These individuals, many of whom are among the true pioneers in commercial UAS usage, can best be characterized as enthusiastic but pragmatic UAS evangelists who don’t want to see unwarranted hyperbole lead to unmet expectations.  Many realize that initially overhyped industries never recover because customers, investors, and employees who were burned in the initial wave of unmet expectations are difficult—if not impossible—to ever win back.  They are passionately committed to the industry’s success and believe that rational expectations are a key part of it.

With no axe to grind or agenda to advance, I [Mitch Solomon] partnered with Colin Snow @droneanalyst to explore whether the skeptics and pragmatists were on to some something.  We felt our combined backgrounds in market intelligence and tech market strategy would give us a reasonable set of expertise to draw upon and would help others form a more balanced opinion of AUVSI’s forecasts.  So over the past several weeks, we’ve been carefully reviewing AUVSI’s report, as follows:

• Compared their research methodologies to what we believe to be best practices in market research based upon our own experience.
• Conducted an in-depth interview with the researchers themselves, so that we could directly ask them questions about their methods and results that were not made clear in the report.
• Initiated a follow-up discussion with AUVSI leadership to understand their perspective on the report and its origins.
• Performed intensive primary research with about 20 carefully selected professionals in the field of precision agriculture to understand their UAS adoption plans, since the report’s findings are almost entirely based upon rapid adoption by American farmers.

We then synthesized our findings into the following five conclusions about the report and its reliability.

Read more here: http://droneanalyst.com/2014/06/25/five-reasons-the-auvsi-got-its-drone-market-forecast-wrong/

This is Part 2 in a two-part series that summarizes my views on why video/film/cinema – not agriculture and farming — will be the largest driver of sUAS commercial businesses. In Part 1, I explore thoughts on the market for video/film/cinema, and below I outline why I believe agriculture will lag in market uptake.

The March 2013 market study produced by the Association of Unmanned Vehicle Systems International (AUVSI) titled “The Economic Impact of Unmanned Aircraft Systems Integration in the United States,” says precision agriculture and public safety will make up more than 90% of the market growth for unmanned aerial systems. The report confidently states, “…the commercial agriculture market is by far the largest segment, dwarfing all others.”

I don’t buy it, and here’s why:

Let’s start with the AUVSI forecast.  Read to what one commenter said in my last post;

“There is a basic problem with the AUVSI study methodology – it took the total arable land area of Japan and divided it by the number of registered UAS performing agricultural roles in that country to provide a demand factor. It then divided the total amount of arable land in the United States by that same demand factor and used this to forecast its prospective future demand for the agricultural sector as a whole. The problem is, the Japanese agricultural land areas do not correlate in size, capacity, or type of agriculture as performed in the United States. In fact the Japanese usage is largely restricted to spraying of rice paddies on small allotments as a replacement for labor which has shifted to the cities. The only possible comparison that the Japanese land area to UAS numbers ratio that could have potential validity is to compare the Japanese ratio with the total amount of land used in rice cultivation in the United States. That is a very different equation than that used by the AUVSI study and can be predicted to give a very different set of economic figures as a result. AUVSI has used very bad modelling to build its argument on, and its figures should be used very, very, very cautiously.”

He’s right.  So how do we get a proper forecast?  That will take some time to work out and look for material from me on that later. For now let’s look how modern agriculture has historically adopted and used technology, because the devil’s in the detail.

Read more here:http://droneanalyst.com/2014/06/11/film-or-farm-which-is-the-bigger-drone-market-part-2/

This is Part 1 in a two-part series that summarizes my views on why video/film/cinema – not agriculture and farming — will be the largest driver of sUAS commercial businesses. In this part I explore thoughts on the market for video/film/cinema, and below I outline why I believe film and video will lead in market uptake. In Part 2 I’ll outline why I believe agriculture will lag in market uptake.

A total economic impact of $13.6 billion and 70,000 new jobs in the first three years. That’s the forecast for what drones will bring to the U.S. once regulations are in place, according to a March 2013 market study produced by the Association of Unmanned Vehicle Systems International (AUVSI). The report entitled “The Economic Impact of Unmanned Aircraft Systems Integration in the United States,” goes on to say that precision agriculture and public safety will make up more than 90% of this growth. Most important, the report confidently states, “…the commercial agriculture market is by far the largest segment, dwarfing all others.”

These figures get repeated over and over again in the media and across the blogosphere.  Existing players and potential new entrants in the UAV market are betting their business futures – and in some cases their entire family’s income and savings – on them.  Everybody wants in on the action.  But are the media, blogosphere, and AUVSI reports correct? I have some serious doubt. Here’s why:  The numbers from my recent study on the impact of Federal Aviation Administration (FAA) rules on the small UAS business say aerial photography and cinema – not agriculture –dominate the other vertical markets and will continue to do so for some time. This two-part post looks at those two industries – film making and agriculture – and attempts to separate market forecast hype from the reality by looking at detailed numbers, market forces, and the specific applications themselves.

Read more here: http://droneanalyst.com/2014/06/05/drones-for-film-and-farm-which-is-the-bigger-market-part-1/

My latest blog looks at the importance of choosing the right drone software platform to support your business.

Just like Google vs. Apple

When the Apple iPad first appeared on the market in 2010, I didn’t jump in to buy one. I didn’t own an iPhone, I had a company-issued Blackberry, so I wasn’t motivated. Besides, I figured there would be a better model a year or so later. So I waited. By the time Apple released the iPad 2 in 2011 all my friends had one. It looked and felt great in the hand. I thought the user interface (UI) was pretty slick. But I also heard about this thing called Android in development by Google and the Open Handset Alliance (OHA) with a similar and perhaps better UI. I was conflicted about which to buy first. I eventually got an Android tablet on the promise of what could be an open source model. However, after one disappointing experience after another, I got rid of it and switched a year later to an iPad first generation. I stayed on that path and haven’t looked back since.

As Diffen says:

Google’s Android and Apple’s iOS are operating systems that provide a good example of open source vs. proprietary. Both are used primarily in mobile technology, such as smartphones and tablets. Android, which is Linux-based and partly open source, is more PC-like than iOS, in that its interface and basic features are generally more customizable from top to bottom. However, iOS’ uniform design elements are sometimes seen as being more user-friendly.

But wait, I thought we were going to discuss drone software. We are.

For all drones, the interaction between the user and the aircraft, and the aircraft and its hardware is mediated by software. As I have written here, the quality of the pilot experience can be driven by the features and the quality of implementation, but the comparison with tablet and smartphones is a good one. Just as with your smartphone and tablet systems, choosing the wrong software platform for your drone can produce some very high switching costs should you decide later you need to change. In this post, I’m going to look beyond manufacturers’ claims and help you understand the differences with the following explanations of what is it, who makes it, who uses it, and what you need to know.

Read more here: http://droneanalyst.com/2014/05/23/which-is-better-open-source-or-proprietary-drone-software/

I just released the findings of my two month survey studying the impact of FAA rules on small unmanned aerial systems (sUAS) in the U.S. You can read the press release here.

Among the many insights I got from the research, these two are the most significant:

1. Unfavorable rules will disintegrate an already fragile market for sUAS in the U.S.
2. Significant market growth awaits once FAA regulations allow.

“Impact of FAA Rules on sUAS Business” examines the economic impact of current FAA policies for sUAS operating in Class G uncontrolled airspace. It evaluates how commercial service providers and operators perceive those rules and assess their importance.

Read more here: http://droneanalyst.com/2014/05/03/will-future-faa-rules-kill-the-small-drones-market/

This post looks at who will dominate the lucrative civilian drones market - the giant defense contractors or the small innovative start-ups.

The year was 1775.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.. “

Ah, the famous opening lines of A Tale of Two Cities. The Charles Dickens passage seems to create a sense of sweeping possibility: the age is everything and nothing at all. Examined closely, the passage also suggests that this is an age of radical opposites with almost no in-betweens. And that is how I would characterize the current state of the small drones business – radical opposites. On the one hand you have the large public defense-related drone contractors like AeroVironment , maker of the Raven, Puma, and Shrike, looking now to capture commercial opportunities in the civilian market. For our purposes they represent the London royal establishment. On the other hand, you have the small private startups like MarcusUAV and Vorobetz looking for a chance for liberty from restrictive air space regulations. They represent the Paris freedom fighters.

Just as in the novel, each city had its own drama and naiveté, so, too, do our players. While everything’s coming up roses in London, everything’s coming up dead in Paris. In fact, in Paris they are so unhappy that they’re beginning to band together as ‘citizens’ of a new republic. They are at their core a revolutionary group. But we can’t tell that they’re revolutionaries, because they’re super-secret. For the most part, they operate their businesses in an underground – as you will see.

Read more here: http://droneanalyst.com/2014/03/07/the-business-of-drones-a-tale-of-two-cities/

My latest blog looks at the role and importance of social media for small UAS service providers.

For some the thought of using Twitter or Facebook or LinkedIn for their small unmanned aerial systems (sUAS) business seems, well, just wrong. What good are they? Aren’t they just platforms for people who want to share what they had for breakfast? It’s not my audience. These social networks seem like a lot work for very little return – and besides aren’t there better things to do?

I understand. I believed this for many years. The very thought of having to maintain a ‘virtual image’ of my company or myself seemed un-human like, let alone un-business like. But a few years ago I started consulting with small and medium businesses, and my job required me to learn social media and actively participate. At first, I went kicking and screaming. What I saw initially was a lot of experimenting. I didn’t see compelling business content (e.g., the breakfast thing). But that was then. Things are very different now. Not only has the strategic role of online social networks progressed, but the media itself has matured. In that progression I have learned some valuable business lessons. In this post want to pass on three of those lessons to inspire your participation.

...read more here http://bit.ly/1jrjB2K

Colin