Exclusive Insight: Teal Group’s new UAS market report

By Luke Geiver | September 29, 2016

The growth rate of civil unmanned aircraft systems (UAS) will quadruple in the next decade, according to the Teal Group, a market analysis firm that has been providing outlook information and intelligence on the UAS market for several years.

Three years ago, Teal Group issued a study on the overall UAS market that has since been cited by entities ranging from small startups to major government agencies across the entire U.S. For the first time, the study has split out civil systems from Teal’s annual UAS market profile.

UAS Magazine spoke with Phil Finnegan, the lead author of the new study about his year spent researching and formulating the first-of-its-kind study. “What we are trying to do is give participants in the UAS sector a sense of the direction of the market, where the opportunities are and a way of looking at the market and being able to better allocate resources in areas of growth,” he said.

In 2016, Teal believes non-military UAS production will total $2.6 billion and by 2025, it will reach $10.9 billion. In two years, the number of UAVs produced for the civil market will double, reaching 2 million by 2018, then doubling again to 4.5 million by 2025, the study said.

Growth will be led by sUAS and will feature near- and longer-term adopters. In the near-term, construction firms and survey groups can gain value by deploying UAVs, Finnegan said. Although agriculture represents a major long-term market for UAVs, other industries are adopting UAS operations into day-to-day work more quickly. According to the report, all 10 of the largest worldwide construction firms are deploying or experimenting with systems and will be able to quickly deploy fleets worldwide. And, Finnegan said, the three largest construction equipment suppliers are either distributing drones or planning to build them.

Drones used to provide communication services and internet broadcasts to areas that are hard to reach or not yet equipped with internet was one area of the study that Finnegan said surprised his team. Airbus is already in production of a system that will be soon be feasible, he said, adding that both Facebook and Google are making great progress in developing and proving a large UAS high altitude long endurance (HALE) system capable of providing internet to remote areas.

Although UAS-based cargo delivery is a popular topic, Finnegan said at this time it was not feasible to make any broad predictions based on the uncertainty of the systems that might be used or the regulations that might be in place for the service.

Government entities will continue to ramp-up their use of UAVs for border protection or, in the case of the North Atlantic Treaty Organization (NATO), for peacekeeping and monitoring work.

The civil (non-military) UAS market will lead the overall growth of the greater UAS market in the next decade due to the mindset of commercial enterprises. While military groups are willing to pay for incremental improvements in technology offerings, commercial enterprises are not. “They are totally focused on the bottom line,” Finnegan said.

The consumer market for hobbyists and non-commercial operators will continue to stay hot over the next few years, the report said. Manufacturers are adding new systems and also working to move up the value chain into the commercial segments, the study noted.

Regulations that have been formed in the past two years have helped to grow the commercial UAS industry, he also said. And, although regulations vary around the world—some countries allow beyond visual line of sight operations while others have restricted all drone use—the global outlook has never been more positive. “There are now enough regulations in place,” he said. “The trend lines are clear enough that you can see how things will develop.”

The study in its entirety is 608-pages and includes forecast spreadsheets that allow for data manipulation, along with a list of US and French UAS operators including the manufacturers of the systems. The study—available for purchase on CD—also includes 10-year forecasts by customer, region and class of UAS as well as by market