The Emerging Drone Industry

While there are a few companies that have made the drone industry a major part of their product lines, China, Israel, and the US have led the way. China led the consumer drone industry last year, with the likes of Dajiang Innovations accounting for 36% of North American drone sales. Meanwhile, US companies have focused on specific commercial hardware and end-to-end software solutions. Israel has been a pioneer in developing military applications. Companies like Tel Aviv-based Airobotics are leading the way in enterprise autonomous solutions.

Other sectors that benefit from drones include agriculture. The UAV industry cites agriculture as an enormous market for drone technology. Using drones in agriculture can help identify failed crops early on, map farmland, and study irrigation systems. Other industries that can benefit from drone technology include architectural firms and construction contractors. Using drone footage to capture a 3D rendering can provide a more detailed picture of a building’s design than is possible with a traditional camera.

Law enforcement uses drones in a similar way. Drones can make maps of heavily-trafficked areas, making it easier to evacuate people in an emergency. Fire and police departments also use drones in disaster zones to find victims who may need assistance or understand the extent of the damage. They can also help to monitor changes over time in a disaster zone. But the potential for drones in emergency response is enormous. And even though the drones can’t carry a load, they can deliver medical supplies to stranded victims.

In addition to the growing demand for services, drone technology has many other applications. Businesses of any size can benefit from drone technologies, from a small real estate firm to a Fortune 500 organization. In many cases, it is not feasible for these organizations to hire full-time drone pilots, software developers, and a technical team to develop and manage their own drone operations. So, third-party solution providers are an appealing option for clients looking to limit their investment and focus resources on other areas of their business.

In addition to consumer drone delivery, the use of drones for medical purposes has also been gaining traction. For example, Zipline delivers blood and vaccine supplies to a remote African region without roads. Drones can also significantly cut the costs of a delivery by as much as 40% compared to a conventional vehicle. A 40% reduction in costs could mean a 15% to 20% increase in profit margin or price reduction. These benefits are expected to grow as wages continue to rise.

The growing drone industry is generating substantial investment and profits. However, the industry has not yet reached the level where they could truly replace human operations. While drone hardware has become affordable and easy to use, it will ultimately be drone services that generate the biggest returns. Companies will sell drone data communications to other companies, turning them over to third parties. In all, this type of value-added service could represent about $23 billion of the total drone market.