Report: Drones Had Rough 2016, But Found Room for Growth

CAMBRIDGE, MASS.—Commercial UAS, aka drones, didn’t take off in 2016 like many thought they would, but Northern Sky Research (NSR) reports that it wasn’t all bad, and that some new avenues have emerged to push commercial UAS forward.

NSR cites over-optimistic growth projections as one reason that 2016 did not lived up to the hype many had for UAS and saw the market failure of drone startup 3DR, Trimble selling off its Gatewing drone business and Parrot laying off employees. NSR also indicates that there may have been an underestimation of threat from competition, including the development of small satellite imaging and analytics.

These setbacks, however, are forcing a re-evaluation of strategy and new business models, according to NSR. Examples of new thinking include franchising and focusing more on enterprise customers. Also, working with imaging services delivered by sUAS platforms will add value to industry verticals and generate future growth in revenues. NSR, in its third “UAS – Satcom & Imaging Markets” report, expects this revenue growth to be driven Energy & Natural Resources, Industrial and Service verticals use of UAS imaging services.

Currently, public agencies like the European Union and the Canadian Space Agency are turning to commercial UAS platforms in the expectation that they will work with satellite imaging and expand available services. As a result, NSR expects the UAS market consolidation to continue and expand its footprint.

“The commercial UAS industry may be down, but not out,” NSR wrote in its summary. “The gradual integration of image analytics into business intelligence processes, used by platform agnostic customers in non-traditional Earth Observation markets will thin the walls between satellite and UAS imaging, as both will co-exist and complement each other… However, caution must be exercised by the industry stakeholders to evaluate capabilities and limitations of UAS platforms, and get the business of economics right.”

The full report from NSR is available here