Kay Wackwitz, Founder and CEO of DRONEII, leading drone industry market consultants, says the hype around commercial drones is over – but that’s a good thing.
In a session on the floor of InterGeo in Stuttgart this morning, Wackwitz gave his summary of the deep market research that the firm produced for their industry whitepaper, the 2019 Drone Industry Barometer. (Read the whole paper here.)
The Hype Cycle and the Adoption Curve
Wackwitz says that drone industry hype is over – but that’s a necessary step in the adoption curve. “It’s a good thing that the hype is over,” says Wackwitz. “Reality and processes are more important.” While business have realized that implementing drone programs may be harder than they thought, systems integrators are now entering the market and building in processes. As the technology becomes easier to use, the adoption curve can take off.
This is something that DRONEII refers to in their whitepaper: the Gartner Hype Cycle, which says that a peak of “inflated expectations” is followed by a trough where the industry may see some failures and consolidations – but after that, a market can rise to a “plateau of productivity.”
Optimism – and Industry Influencers
When the DRONEII researchers polled for optimism about the drone industry, they found that it had palled slightly since last year. That’s not surprising, says Wackwitz: it’s a reasonable after effect as the hype wears off. (Somewhat humourously, the market segment that is most optimistic about their outlook is the counter drone segment.)
Another change over last year is the perception of what the primary influences are for the drone industry. While last year rule making authorities were considered the main market influencer, in 2019 rulemakers dropped to second place. In 2019, respondents saw providers of end to end solutions as the primary influencers.
Market Size and Investment Predictions
Market size predictions are notoriously varied, but DRONEII uses real evidence and real data on drone industry customers to build a bottom up model. Their prediction is that the drone market will reach $43.1 billion USD by 2024 – and that’s certainly reason for industry watchers to remain optimistic.
Additionally, while 2018 was a challenging year for companies seeking investment, Wackwitz says the environment will improve: “2018 was a difficult year,” he says, “but the trust in the market is still strong, and the investments are still there. The industry is still growing. Investments are still going strong.” Wackwitz sees the next year’s investment landscape as being smaller in overall number of investments, but with larger dollar values.
The Lights are Still Green
In conversation after the presentation, Wackwitz says that the lack of hype isn’t bad for the industry: “It may be harder to sell drones without the hype: but what’s being sold now is a better product. Now what counts is what you can do.”
“We have an exciting time ahead of us – all the lights are still on green.”
Miriam McNabb is the Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a professional drone services marketplace, and a fascinated observer of the emerging drone industry and the regulatory environment for drones. Miriam has penned over 3,000 articles focused on the commercial drone space and is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and over 20 years of experience in high tech sales and marketing for new technologies.
For drone industry consulting or writing, Email Miriam.
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[…] assumptions and expectations into question, leading drone market analysts DRONEII posited that the drone hype cycle was over – but that drone companies with good fundamentals were still of prime interest to investors. […]