Inside Unmanned Systems

DEC 2018 - JAN 2019

Inside Unmanned Systems provides actionable business intelligence to decision-makers and influencers operating within the global UAS community. Features include analysis of key technologies, policy/regulatory developments and new product design.

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46  December 2018/January 2019 unmanned systems inside AIR MARKET FORECAST Photo courtesy of Airbus. from large firms down to smaller incu- bators and venture capital specialists. Teal's tracking identified a total of $2 billion in investments in those firms from 2012 through June 30, 2018 in- clusive, he said. The current surge builds on invest- ments made in UAS firms in 2014 and 2015 in anticipation of new rules easing the regulatory environment for drones. Data from CB Insights showed venture capitalists poured $166 million into unmanned aircraft companies from April 2014 through April 2015—a 176 percent increase over the same period the year before. Teal found investment surged from $158 million in 2014 to $493 million in 2015. The release of the Federal Aviation Administration's (FAA) Part 107 Rules in 2016 further heated the competition to identify and bet on potential winners in the new in- dustry, according to Teal. U.S. WINS INVESTMENT RACE So far the United States has been the clear winner in the contest for VC cash. According to Teal, American firms se- cured 76 percent of UAS venture capital investment over the 2012-2018 period surpassing the second and third place winners—China and Europe—by an order of magnitude. Part of what is capturing investors' attention is U.S. strength in the de- velopment of drone software, analyt- ics and services. The involvement of technology leaders such as Intel Corp., Amazon, Facebook, Google, Sony, Verizon, Mitsubishi, General Electric Co., Microsoft, Apple and Samsung— who are turbocharging the sector with talent, technology and resources—is ex- panding and enhancing that expertise. "While funding does go for new drones focused on specialized markets, increasingly the venture capital funding is shifting from hardware to software and services that will make existing drones more useful," according to Teal. "Funding is being used to develop the business structures that are needed to quickly allow industry to develop scale, such as national networks of service pro- viders and improved analytics to make UAS easier to use and more proscriptive. It is also going to the companies that will lay the foundations for access to airspace such as detect and avoid technology and unmanned traffic management." POCKETS OF GROWTH Construction, energy and insurance are all areas Teal believes will ramp up quickly—in part because growth is be- ing driven by large companies that have the resources and organizational capac- ity to deploy fleets of UAS once they've determined such a move makes sense. Of these three, Teal Group projects the largest near-term market for com- mercial UAS will be construction, which will use systems ranging from small prosumer drones for simple tasks like roof inspections to higher end, relatively autonomous mini sys- tems that are able to track progress across construction sites. "The 10 largest worldwide construc- tion companies are all either working to integrate or are studying the inte- gration of UAS in their operations," Finnegan wrote. "The three largest construction equipment companies are adding UAS to their product lines, ei- ther from an outside vendor or through developing their own systems." Energy also has emerged as an im- portant sector. There are immediate applications like f lair stack and utility pole inspection that offer clear, imme- diate safety improvements for employ- ees and extremely high cost savings. Other areas—such as transmission line and pipeline inspection—will take more time to develop because of the need to establish a beyond-visual-line-of-sight (BVLOS) regulatory framework. In a vote of confidence on the prospect for such regulatory advances, Teal is as- suming BVLOS inspections will be phased in over a five-year period during the 10-year forecast window. Insurance is an area where there is a likelihood of fleet deployments by large enterprises. The typical UAS, however, is The Zephyr high-altitude, long-endurance drone, manufactured by Airbus, does not require an airport runway to launch.

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