Drone Demand Sizzles Heading into the Holidays

(Source: Market Watch)  

The retail world is coming upon its most lucrative time of the year: the holiday season. But move aside Disney Frozen Elsa dolls, you have a competitor.

For the first time, drones are among the top autofill responses when users type “I want to buy” on the Google Inc. search bar, joining regulars such as “house,” “car,” and “stock” and replacing the word “gun” in the top four.

This comes from a report on off-the-grid economic indicators compiled by New York-based brokerage ConvergEx Group, which keeps quarterly tabs on Google Trends data.

The analysis speaks to a growing market for consumer drones, which appear to be joining the ranks in popularity of consumer tech devices such as GoPro —only with the ability to fly up to 400 feet above the Earth and stream dizzying videos to smartphones in real time.

French manufacturer Parrot SA which is among the three largest consumer drone companies in the world, said drone sales this year are up three times over 2013, led by its lower-tier Mini Drone, which retails for $100. Parrot expects sales to triple again in 2015.

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“The growth for us has been significant,” said Peter George, Parrot’s vice president of sales for North America, adding that demand has spiked recently amid the approaching holiday season and loosening regulations on commercial drone use.

Parrot raked in 42.1 million euros ($53.35 million) from drones in fiscal 2013, comprising some 18% of Parrot’s total revenues of 235.1 million euros last year, according to filings.

The other two major drone makers, DJI Innovations and 3D Robotics, are privately held. But some data point to DJI generating revenues of around $131 million in 2013, while 3D Robotics raised more than $30 million in venture capital last year and is said to have sold more than 30,000 units by midyear.

And even as consumers are looking at drones as potential Christmas gifts, commercial uses are expanding.

“A year ago people didn’t even know drones were used by the military,” said Nicholas Colas, ConvergEx chief market strategist. “To have a drone break in [to Google Trends] and now be considered a consumer device, is fascinating.”

Part of the meteoric rise is the fact that nonmilitary drones are being developed for a wide range of applications, thanks in part to loosened regulations by the U.S. Federal Aviation Administration regarding unmanned aircraft. Commercial drones are now being designed to do anything from mapping national parks and monitoring traffic to locating people during emergencies.

Just law week the FAA gave the green light for six movie studios to fly unmanned aircraft for films and television shows. It said it was considering dozens of other requests from commercial companies, including Amazon.com Inc. AMZN, -0.83% which is seeking approval for an all-drone delivery service, Amazon PrimeAir.

Silicon Valley heavyweights have joined the chorus in recent months, with Facebook Inc. buying U.K.-based drone company Ascenta, which makes long-lasting solar-powered drones, in March. In April, Google scooped up high-altitude drone maker Titan, just four months after buying robotics maker Boston Dynamics.

Parrot will unleash its highest-end consumer drone, called the Bebop, in November, expected to retail around $500.

Bebop will be adorned with a high-definition, 15-megapixel, fisheye camera—as good as any in GoPro’s Hero camera line.

Parrot said it has already been contacted by Walt Disney Co.’s Pixar and Warner Bros. Entertainment TWX, -0.25% about using its drones to film movies.

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