Business Insider has released their latest drone market forecast, and it indicates that industry growth is still robust.
While the report says that commercial growth was significantly boosted by the enactment of Part 107 and the regularization of commercial drone use, Business Insider says that forecasting the drone industry is challenging. While Gartner research says that total drone unit sales climed to 2.2 million in 2016, the Consumer Technology Association says that 2.4 million personal drones were sold just in the U.S. during 2016, doubling the number sold in 2015.
The discrepency comes, explains BI, because Gartner defines drones as aircraft that connect to the Internet, while CTA counts smaller toy drones that may not even need to process data.
Using BI’s own definition, however, drone sales are charging forward. “BI Intelligence, Business Insider’s premium research service, defines drones as aerial vehicles that can fly autonomously or be piloted by a remote individual,” says BI. “Under that criterion, BI Intelligence expects sales of drones to surpass $12 billion in 2021. That’s up by a compound annual growth rate (CAGR) of 7.6% from $8.5 billion in 2016.”
The company predicts growth across all of the three major segments of the industry: consumer, commercial, and government.
“Consumer drones are drones purchased by individuals for noncommercial and nonprofessional purposes. BI Intelligence expects consumer drone shipments to hit 29 million in 2021, which would indicate a CAGR of 31.3%,” says the report. “For enterprise drones, BI Intelligence expects shipments to reach 805,000 in 2021 with a five-year CAGR of 51% from 102,600 in 2016.”
“Finally, government drones fall into two categories: military and public safety. The forecast for these is a less clear, but the military drone market is by far the most mature right now. The U.S. military has been using drones for combat since 2001, and it rapidly expanded its drone fleet to more than 7,000 by 2012. The Department of Defense budget in 2016 allocated $2.9 billion for more than 50 new drones for combat and surveillance, according to the Bard Center for the Study of Drones.”
Researchers also predict that market giant DJI may face competition in the coming years. “In 2015, consultancy Frost & Sullivan estimated that China-based DJI owned 70% of the market for consumer and commercial drones. Its Phantom drones are the most popular in the world for both consumer and commercial purposes thanks to their reliability and superior photography and video capture capabilities,” says BI.
“But several smaller companies, such as 3D Robotics, Lilu, Yuneec, and Parrot are all trying to chip away at DJI’s market share.”
The report concludes that the commercial market will be the segment that drives the industry. “The enterprise drone market has significantly greater long-term potential both in size and economic impact than the consumer or military drone industries. It is the smallest but fastest-growing drone market by revenue,” says BI.