Markets And Markets: Military And Security Applications To Dominate UAV Industry

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PUNE, INDIA (MnM) — Military and security applications for unmanned aerial vehicles will represent about 85% of the market through 2022, according to the Markets and Markets global research firm.

Global research and consulting firm Markets and Markets (MnM) says relaxed regulations for commercial drones in US airspace will result in an annual market growth rate of 13.2% for unmanned aerial vehicles (UAV) through 2022.

Amit Gulhane, the MnM team lead in India for aviation and defense electronics, told UAS Magazine that the projection is based on the 500 exemptions the Federal Aviation Administration (FAA) has recently granted to more than 20 industries.

“We expect various other major exemptions related to weight and endurance for several industries, including agriculture, real estate, construction and oil and gas, among others,” he explained.

Gulhane noted that the unit shipment of UAVs for military or security applications is much higher when compared to other commercial markets, such as agriculture or infrastructure inspection. He said commercial applications capture just 15% of the UAV market. MnM’s research doesn’t include the hobbyist and recreational drone market.

“We estimate that the market for military application will grow at a CAGR (compound annual growth rate) of approximately 13 percent while the commercial market will grow at a CAGR of 18% through 2022,” he said. “This way, although the commercial market will have smaller share, it is expected to grow at the fastest rate.”

MnM predicts that in Asia, the annual UAS market growth rate during the same period will approach 14% CAGR. “China and India are expected to increase their defense budget and focus on more investments on advanced platforms,” Gulhane said.

In the Asia and Pacific UAV market, he estimates that about 15% of the total market share is expected to grow the fastest—around 17% CAGR.

“Owing to the internal political tensions, the Asia-Pacific region has been witnessing instability, which, in turn, has propelled the development of UAVs that are utilized in border security,” Gulhane explained. “This serves to be one of the most significant factors driving the growth of the UAV market. Countries such as Japan, South Korea, Malaysia, Singapore, Taiwan and Indonesia also contribute to the growth of the UAV market in the Asia-Pacific region.”

Gulhane expects the Asia and Pacific UAV market to be dominated by military applications. However, commercial applications, which currently have about a 13% market share, will experience strong growth of roughly 25% through 2022. Agricultural applications will dominate the commercial segment, he said.

In the European UAV market, MnM projects an approximate growth rate of about 11 percent CAGR from 2016 to 2022. Military and security applications will account for about 88% of this market while civil and commercial applications will make up just 12%.

This article is the latest entry for the ongoing knowledge partnership between Markets and Markets (MnM) and 21st Century Asian Arms Race. MnM is a world leader in high growth B2B research and maintains offices in India and the US. MnM’s flagship competitive intelligence and research platform RT connects over 200,000 markets and entire value chains to forecast and understand revenue opportunities in niche sectors.