2019 was a year of change and progress for the drone industry. What comes next – more consolidation and an industry slow down, or more exciting innovation and industry expansion? We asked some of the industry’s leading voices for their 2020 predictions.
DRONELIFE asked participants to comment on 3 important questions- and the variety of answers may surprise you. Read on to see what our panel agreed upon – and how their predictions differed widely.
What new vertical market or application will be the number one growth opportunity in 2020?
A lot of disagreement on this question could mean good things for the industry – indicating lots of different opportunities for growth. Annette Taber, Senior Vice President of Industry Outreach at CompTIA, the leading global technology certification organization, says that package delivery is going to be a major story in 2020: “We’re already starting to see it with UPS, FedEx, and Amazon,” says Taber. “The drone package delivery market is expected to reach $2.1 billion in 2023 and $27.4 billion by 2030, growing 45% a year during that period according to ResearchAndMarkets.com.” Related to that, Taber sees an opportunity in cybersecurity also: “As demand for this market increases, the need to prevent cybersecurity hacks, and expand AI and data analytics features will become more important.”
Drone mapping platform Pix4D is focused in 2020 on traditional industries, like construction. Industry thought leader and founder Christoph Strecha explains that technology has evolved to provide even better value, as products like their Pix4D Crane Camera solution and Pix4Dbim deliver project updates automatically. “Communication is essential because preventing rework can be the difference between delivering a project on time and on budget, or not,” says Strecha.
Philippe Simard, PhD, Co-founder and CEO of mapping software provider SimActive, also sees growth in traditional industries, mentioning mining specifically: and InsurTech company Skywatch.AI CEO Tomer Kashi agrees that inspection and mapping in traditional industries are poised for growth, adding agriculture to the list: “What started from “simple” videography and got boosted with the usage of smart software will move to the next stage with the adoption of advanced AI-based inspection and mapping,” says Kashi.
French automated drone company Azur Drones is ready for the security segment to grow in 2020, says CEO Jean-Marc Crépin: “In recent years, drone market studies have been predicting an explosion in the security drone segment, without this really happening because of the complexity of using conventional UAVs. We are convinced that this explosion will take place in 2020 thanks to regulatory and technological advances, particularly in the field of drone automation.”
Other participants saw not a single vertical expansion, but a deepening of adoption across verticals. Thermal solutions provider FLIR‘s Randall Warnas has been a leading voice in the industry as the industry has evolved – and he says in 2020, all the test cases and pilot programs are ready to pay off: “As drone technologies, regulation, and the use-cases which they are operated mature, we can expect to see a deepening of adoption rather than a broadening of applications,” says Warnas. “Package and medical deliveries are at the forefront of making more ground in 2020. For commercial operators, however, we can expect to see more drone use in the energy and telecommunication sectors.”
Warnas points out that technology advancements are improving the outlook for the industry. “With reduced cost and size of RTK systems, democratizing precision will lead to widespread surveying and inspections,” says Warnas. “Especially in GPS-denied areas or missions near electromagnetic interference; advanced technology will break down these barriers.”
Dr. Earnest Earon, Executive Vice President of AI at REIN, agrees – and points out the opportunity in medical delivery is “particularly noteworthy.”
“I would say that the real expansion will be less about brand new verticals or applications and more about real adoption and commercial successes,” says Earon. “Companies and operators have been exploring and experimenting with applications and new opportunities for years – as soon as technology made them feasible. However, there are some areas where the current state of the art is so constrained, making them extremely ripe for growth and rather noteworthy. In particular, delivery, especially medical delivery, will see significant expansion in many jurisdictions from limited pilots to more meaningful rollouts.”
What new technology development do you think might “change the game” in 2020?
AI is the top new tech – but maybe not in 2020.
Here again our experts offered a variety of answers and reasons: but across the board, AI and autonomous flight were the top mentioned technologies. Some experts, however, offered some more specific developments which could materially impact drone industry adoption. Philippe Simard says they’re seeing richer outcome from aerial data: “We believe technologies that are able to combine different sources of information, such as LiDAR and imagery, will quickly evolve. The ability to integrate multiple types of data together leads to much richer datasets and better decision making for the final users,” says Simard.
Pix4D’s Strecha points out that while AI is a really exciting development, it may not be a significant driver in the next 12 months: “AI will be the biggest game changer in the long term, but the technology is still in its infancy, and we won’t see it reach its full potential in 2020,” says Strecha. “What we will see more of is 8k video – once the technology reaches the consumer level, it will literally change the way we see and capture the world.”
REIN’s Earon points out that the evolving industry is the result of many technology developments: “I remain really excited about what AI and analytics are going to do in the drone space. I expect to see much faster turnaround on aerial results that are going to turn applications from ‘possible’ to ‘feasible.'” says Earon. “This, like so much of aviation through the years, will be a result of the many advancements in the industry: better sensors that provide increased fidelity, better computing resources that enable edge-
Finally, we asked our panel the $50 billion (more or less, depending upon what research report you choose) question:
Up or down: do you expect the drone industry to expand with more investment and more businesses or consolidate with fewer large investments and more takeovers?
From absolutely up to consolidation across the board, experts have differing opinions on what to expect: but maturity seems to be a major theme.
Annette Taber is optimistic – but says the industry needs to work to keep up momentum. “I do not see the industry slowing down or consolidating,” says Taber. “I believe we still have a lot of work to do, not so much in understanding the use cases to improve business operations, but rather in driving the adoption of those use cases with enterprises big and small. It’s the marketing aspect we’re missing.” Skywatch’s Kashi is also in the “up” camp, but does see inevitable consolidation: “Definitely Up. 2020 will be the “year of enlightment”,” says Kashi. “Drones are no longer a hype, and more and more commercial users have learned how to use them effectively to increase productivity.
This year, while the industry will grow, we do expect consolidation. Established players in the drone ecosystem will focus on revenue generation and continued growth, and smaller players might merge with others or disappear,” he says.
Maturity – and Slower Growth
Maturity isn’t really bad – it just means that the industry may need to more focused on differentiation and real ROI for customers in order to survive. Philippe Simard says that the industry is definitely in a slower growth phase. “We foresee the industry to keep consolidating as it becomes more mature,” says Simard. “In general, people have now a much better understanding of drone technologies and the applications that are viable businesswise. The days where the number of new players were exploding are definitely over.”
Azur Drones’ Crépin agrees. “After a development phase essentially driven by the fascination around drones as objects, the drone market has calmed down as a certain number of operators have stopped trading,” says Crépin. “Investors are today more wary of the professional drone market. The market should thus consolidate and focus on actors who create value with real business models that can provide customers with a genuine service.”
Pix4D’s Strecha agrees too, but says that the phase isn’t a reason to be discouraged: “The drone industry is rapidly maturing. We can expect to see more companies choosing to consolidate – although in such a dynamic industry, there is plenty of room for innovation,” he points out.
FLIR’s Randall Warnas gets more specific – and has a balanced view of growth in 2020. “Investment will likely slow in the early part of 2020 due to continued geopolitical and regulatory uncertainty,” says Warnas. “Although consolidation has been a big story for the past two years, the second half of 2020 should see an increase in interest and investment.”
“Drone technology has felt mostly stagnant for a few years, evidenced by the drop in industry spend on attending drone expos,” Warnas points out. “In 2020 there will likely be more exploration of what this technology can do, and we will see how drone technology will make truly lasting, real contributions for the next chapter in unmanned systems.”
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 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 or (for paid consulting engagements only) request a meeting through AdvisoryCloud:
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