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World Civil Unmanned Aerial SystemsMARKET PROFILE AND FORECAST

2017

Philip Finnegan, Senior Analyst - Defense & Aerospace Companies (703) 385-1992 ext. 105 email: [email protected]

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©Teal Group Corporation World Civil UAS Market Profile & Forecast 2017 Edition

Table of Contents

Executive Overview ................................................................................. 1

The Civil UAS Market Outlook ................................................................................................... 1

Introduction ............................................................................................................................................................... 1 Study Parameters ...................................................................................................................................................... 3 Forecast Assumptions ............................................................................................................................................... 3

Civil Market Enabling Conditions .............................................................................................. 5

FAA Continuing Progress in Opening National Airspace ........................................................................................ 5 Europe in Danger of Falling Behind the United States ............................................................................................. 7 Asia-Pacific Countries Diverge in Their Level of Support for Supporting UAS Adoption .................................... 10 Influx of Major Technology Companies Spurring Progress ................................................................................... 10 Flood of Investment in Commercial UAS Tilts Heavily Towards United States ................................................... 11 Development of the UAS Services Industry ........................................................................................................... 11 Civil Government Market Growth Boosted by Immigration Concerns .................................................................. 12

Commercial Market Size and Timing ....................................................................................... 14

Emergence of Enterprise Markets in Construction, Energy, Insurance .................................................................. 14 Precision Agriculture .............................................................................................................................................. 14 Communications ..................................................................................................................................................... 16 Delivery .................................................................................................................................................................. 16

Consumer Drone Market Growth to Continue ........................................................................ 17

Uncertainties About Civil/Commercial Market Growth ........................................................ 18

Forecast Summaries.................................................................................................................... 19

Development of the Civil/Commercial UAS Industry ....................... 23

Emergence of the Commercial UAS Industry .......................................................................... 23

Technology Leaders Accelerating Industry Development ...................................................................................... 23 Defense/Aerospace Companies’ Turning to Services for Civil/Commercial Market ............................................. 24 Growing Recognition of the Need for Hybrid Hardware/Software/Data Analysis Companies .............................. 26 The Service Industry Draws Multinationals and Small Players .............................................................................. 26 Rapid Growth but Profits Limited During Ramp-Up.............................................................................................. 27 The Structure of the Nascent Industry Takes Shape ............................................................................................... 28 Moving Up the Value Chain ................................................................................................................................... 30

Mergers and Acquisitions .......................................................................................................... 32

Acquisitions Picking Up as Outside Tech Companies Seek to Enter UAS Market ................................................ 32 Solar-Powered Systems Began Acquisition Drive .................................................................................................. 34 Future Consolidation ............................................................................................................................................... 34

Venture Capital Funding ........................................................................................................... 35

Venture Capital Drone Investment Soaring ............................................................................................................ 35 Investments Greatest in US and Chinese Drone Companies .................................................................................. 36 Future Venture Capital Funding Outlook ............................................................................................................... 37

US Civil Government Markets ............................................................ 43

FAA Begins Opening National Airspace................................................................................... 43

The Rule on Small UAS ......................................................................................................................................... 43 Shifting Section 333 Approval Process .................................................................................................................. 44 Emergence of the Initial US Commercial Market ................................................................................................... 44 Earlier FAA Movement in Allowing US Commercial UAS Operations ................................................................ 45 Frustrations with the Pace of FAA Progress ........................................................................................................... 45

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Past Blueprint Highlighting the Difficulties of National Airspace Access ............................................................. 46

US Federal Government Use Cases ........................................................................................... 46

Department of Homeland Security .......................................................................................................................... 46

Overview................................................................................................................................................................. 46 Customs & Border Protection ................................................................................................................................. 50 Coast Guard ............................................................................................................................................................ 55

Department of State ................................................................................................................................................... 61

Overview................................................................................................................................................................. 61

Department of Justice ............................................................................................................................................... 61

Federal Bureau of Investigation Building Up its Capabilities ................................................................................ 61 Bureau of Alcohol, Tobacco, Firearms & Explosives Faces UAS Setbacks .......................................................... 62 Drug Enforcement Agency Ending Its Program ..................................................................................................... 62 US Marshall Service ............................................................................................................................................... 63 Department of Justice Assistance to Local Law Enforcement ................................................................................ 63

US Department of Interior ........................................................................................................................................ 64

Procurement Outlook .............................................................................................................................................. 64 US Geological Survey ............................................................................................................................................ 67 Bureau of Land Management .................................................................................................................................. 68 Forestry Applications .............................................................................................................................................. 69

US Department of Agriculture ................................................................................................................................. 70

Forest Service ......................................................................................................................................................... 70

US Department of Commerce ................................................................................................................................... 71

National Oceanic and Atmospheric Administration ............................................................................................... 71

Other Federal Government UAV Users .................................................................................................................. 73

National Institute of Standards ................................................................................................................................ 73 NASA Research UAVs ........................................................................................................................................... 73 Other Federal Agencies........................................................................................................................................... 74

State and Local Government ..................................................................................................... 75

State and Local Law Enforcement and Public Safety ............................................................................................. 75

US Civil Government Market Forecast .................................................................................... 80

International Civil Government Markets ........................................... 81

European Union Agencies & Programs .................................................................................... 81

European Border and Coast Guard ......................................................................................................................... 81 Frontex-European Agency for the Management of External Borders..................................................................... 82 European Maritime Safety Agency ......................................................................................................................... 83 CLOSEYE .............................................................................................................................................................. 85 European Fisheries Control Agency ....................................................................................................................... 85 LUMEN .................................................................................................................................................................. 86 Maritime Rescue Coordination Center (Refugee Operations) ................................................................................ 87 European Emergency Number Association ............................................................................................................ 88

European Country Profiles ........................................................................................................ 88

Belgium................................................................................................................................................................... 88 Croatia..................................................................................................................................................................... 89 Denmark ................................................................................................................................................................. 89 Estonia .................................................................................................................................................................... 89

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Finland .................................................................................................................................................................... 89 France ..................................................................................................................................................................... 89 Germany ................................................................................................................................................................. 90 Italy ......................................................................................................................................................................... 90 Latvia ...................................................................................................................................................................... 90 Lithuania ................................................................................................................................................................. 90 Netherlands ............................................................................................................................................................. 90 Norway ................................................................................................................................................................... 91 Russian Federation .................................................................................................................................................. 91 Spain ....................................................................................................................................................................... 92 Sweden .................................................................................................................................................................... 92 Switzerland ............................................................................................................................................................. 92 United Kingdom ..................................................................................................................................................... 93

European Civil Government Forecast ...................................................................................... 93

Rest of the World ........................................................................................................................ 94

Overview................................................................................................................................................................. 94

United Nations & Other Multinational Institutions ................................................................ 95

United Nations ........................................................................................................................................................ 95 International Organization for Migration ................................................................................................................ 98 Organization for Security & Co-operation in Europe ............................................................................................. 98 World Food Organization ....................................................................................................................................... 99 World Bank ............................................................................................................................................................. 99

Rest of the World Country Profiles ........................................................................................... 99

Australia .................................................................................................................................................................. 99 Brazil .................................................................................................................................................................... 100 Canada .................................................................................................................................................................. 101 Chile ...................................................................................................................................................................... 102 China ..................................................................................................................................................................... 102 Colombia............................................................................................................................................................... 103 India ...................................................................................................................................................................... 103 Indonesia ............................................................................................................................................................... 103 Japan ..................................................................................................................................................................... 103 Malaysia ................................................................................................................................................................ 104 Mexico .................................................................................................................................................................. 105 New Zealand ......................................................................................................................................................... 106 Panama .................................................................................................................................................................. 106 Singapore .............................................................................................................................................................. 106 South Africa .......................................................................................................................................................... 107 Thailand ................................................................................................................................................................ 107 United Arab Emirates ........................................................................................................................................... 107

Rest of the World Civil Government Forecast ....................................................................... 108

Commercial/Consumer Markets ....................................................... 109

Construction .............................................................................................................................. 109

Market Interest Soaring in 2017 ........................................................................................................................... 109 State of Adoption .................................................................................................................................................. 110 Potential Applications ........................................................................................................................................... 111 Construction Manufacturers’ Plans for UAS Operations ...................................................................................... 111 Largest Construction Contractors Worldwide Embracing UAS ........................................................................... 112 Forecast ................................................................................................................................................................. 113

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Energy (Oil & Gas/Utilities) ..................................................................................................... 116

Common Characteristics of Oil and Gas and Utilities .......................................................................................... 116 UAS Attractiveness for Oil and Gas ..................................................................................................................... 117 A Growing Menu or Service Offerings in Oil and Gas Promise to Spur Market Growth .................................... 117 Oil and Gas Pipeline Market Requirements .......................................................................................................... 119 Pipeline Patrol: A Tale of Two Markets ............................................................................................................... 120 Potential UAS Applications for Utilities .............................................................................................................. 122 Transmission Line Inspections in United States ................................................................................................... 122 Power Line Inspections in Europe and Asia ......................................................................................................... 124 Choice of System for Transmission Line Inspection ............................................................................................ 125 Forecast ................................................................................................................................................................. 125

Agriculture................................................................................................................................. 128

Agricultural UAS Applications ............................................................................................................................. 128 UAS Spraying Market Remains Exclusively an Asia-Pacific Market .................................................................. 129 Emergence of the UAS Agricultural Imagery Market .......................................................................................... 131 Forecast ................................................................................................................................................................. 131

Communications ....................................................................................................................... 135

Low Cost HALE Technology Rapidly Emerging ................................................................................................. 135 Solar HALE Pushes Ahead into Production ......................................................................................................... 136 Google’s Past Approach ....................................................................................................................................... 138 Facebook’s Approach ........................................................................................................................................... 138 Solar UAS Operating Procedure for Internet ........................................................................................................ 139 Use of Smaller UAS for Inspections of Communications Infrastructure .............................................................. 139 Emergency Communications & Other Applications for Small UAS .................................................................... 141 Forecast ................................................................................................................................................................. 142

Insurance ................................................................................................................................... 144

Insurance Market Outlook .................................................................................................................................... 144 US Insurance Companies Forging Ahead Quickly ............................................................................................... 145 Drones Being Tested ............................................................................................................................................. 146 International Insurance UAS Outlook ................................................................................................................... 146 Forecast ................................................................................................................................................................. 147

General Photography/Real Estate ........................................................................................... 150

Overall Market ...................................................................................................................................................... 150 Real Estate, News Gathering & Cinematography ................................................................................................. 151 Forecast ................................................................................................................................................................. 152

Delivery ...................................................................................................................................... 154

Large Potential Delivery Market .......................................................................................................................... 154 US Regulatory Issues ............................................................................................................................................ 155 Other Obstacles Needing to be Overcome ............................................................................................................ 155 China Moving Ahead ............................................................................................................................................ 156 Most Promising Delivery Uses in the Near Term ................................................................................................. 157

Consumer Drones...................................................................................................................... 159

Explosive Growth of the Consumer Drone Market .............................................................................................. 159 Catalysts for Continued Market Growth ............................................................................................................... 160 Forecast ................................................................................................................................................................. 161

Company Profiles ................................................................................ 163

3DRobotics ............................................................................................................................................................... 163 Aerialtronics ............................................................................................................................................................. 164

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AeroVironment Inc. ................................................................................................................................................. 165 Aeryon Labs Inc....................................................................................................................................................... 171 AgEagle Aerial Systems .......................................................................................................................................... 173 Aibotix ...................................................................................................................................................................... 174 Airbus Defense & Space (formerly European Defense and Space Co.) .............................................................. 174 AirMap ..................................................................................................................................................................... 177 Airobotics ................................................................................................................................................................. 177 AirRobot GmbH & Co. ........................................................................................................................................... 178 Airware ..................................................................................................................................................................... 179 Amazon.Com, Inc. ................................................................................................................................................... 181 Altavian Inc. ............................................................................................................................................................. 182 Ascending Technologies (Intel) ............................................................................................................................... 183 AT&T ....................................................................................................................................................................... 184 Aurora Flight Sciences ............................................................................................................................................ 186 The Boeing Co. ......................................................................................................................................................... 187 CAE Inc. ................................................................................................................................................................... 189 CACI International Inc. .......................................................................................................................................... 190 Cape Productions ..................................................................................................................................................... 191 CyberHawk Innovations Ltd. ................................................................................................................................. 191 CyPhy Works, Inc.................................................................................................................................................... 193 Delair-Tech ............................................................................................................................................................... 194 Delta Drone .............................................................................................................................................................. 197 Denel ......................................................................................................................................................................... 197 DJI Innovations ....................................................................................................................................................... 198 Draganfly Innovations Inc. ..................................................................................................................................... 202 Dragonfly Pictures, Inc. .......................................................................................................................................... 202 Drone Deploy ........................................................................................................................................................... 203 Elbit Systems Ltd. .................................................................................................................................................... 204 enRoute Co., Ltd. ..................................................................................................................................................... 207 Ehang (Beijing Yi-Hang Creation Science & Technology Co., Ltd.) .................................................................. 207 EMT Ingenieurgesellschaft ..................................................................................................................................... 208 Facebook, Inc. .......................................................................................................................................................... 209 Falcon Unmanned .................................................................................................................................................... 210 FLIR Systems, Inc. .................................................................................................................................................. 211 Flirtey ....................................................................................................................................................................... 212 General Atomics Aeronautical Systems, Inc. ........................................................................................................ 213 General Electric-Avitas Systems ............................................................................................................................ 217 Google ....................................................................................................................................................................... 217 GoPro ........................................................................................................................................................................ 219 Honeywell International Inc. .................................................................................................................................. 219 Intel Corp. ................................................................................................................................................................ 221 Insitu Inc................................................................................................................................................................... 223 Israel Aerospace Industries Ltd. ............................................................................................................................ 226 Kaman Corp. ............................................................................................................................................................ 227 Kespry ....................................................................................................................................................................... 229 Leonardo (formerly Finmeccanica) ....................................................................................................................... 230 Leptron Unmanned Aircraft Systems, Inc. ........................................................................................................... 231 Lockheed Martin Corp. .......................................................................................................................................... 231 MacDonald, Dettwiler and Associates Ltd. ........................................................................................................... 234 Martek Marine ......................................................................................................................................................... 235 Matternet .................................................................................................................................................................. 235 Measure .................................................................................................................................................................... 236 microdrones GmbH ................................................................................................................................................. 237 Microsoft Corp. ........................................................................................................................................................ 238 Northrop Grumman Corp. ..................................................................................................................................... 239 Parrot SA .................................................................................................................................................................. 240 PrecisionHawk Inc. .................................................................................................................................................. 246

Table of Contents Page vi


Prodrone Co. Ltd. .................................................................................................................................................... 248 Prioria Robotics ....................................................................................................................................................... 249 QinetiQ ..................................................................................................................................................................... 250 Qualcomm Technologies Inc. .................................................................................................................................. 250 Raytheon Co. ............................................................................................................................................................ 252 Redbird ..................................................................................................................................................................... 253 Rockwell Collins Inc. ............................................................................................................................................... 255 Saab Group .............................................................................................................................................................. 256 Safran ....................................................................................................................................................................... 256 Samsung.................................................................................................................................................................... 258 Schiebel Elektronische Geraete GmbH ................................................................................................................. 258 Sikorsky Aircraft Co. (now Part of Lockheed Martin Corp.) ............................................................................. 260 Skycatch.................................................................................................................................................................... 261 Sky-Futures .............................................................................................................................................................. 262 SkySpecs ................................................................................................................................................................... 263 Skyward .................................................................................................................................................................... 264 Singapore Aerospace ............................................................................................................................................... 264 Sony (Aerosense) ...................................................................................................................................................... 265 Stark Aerospace ....................................................................................................................................................... 265 Survey Copter .......................................................................................................................................................... 266 Swift Engineering .................................................................................................................................................... 267 Tekever Group ......................................................................................................................................................... 268 Terra Drone ............................................................................................................................................................. 269 Textron Systems Unmanned Systems .................................................................................................................... 269 Thales ........................................................................................................................................................................ 272 Trimble Navigation .................................................................................................................................................. 272 UMS Skeldar ............................................................................................................................................................ 273 Verizon...................................................................................................................................................................... 274 VT Group ................................................................................................................................................................. 274 XAircraft .................................................................................................................................................................. 275 Yamaha Motor Co. Ltd. .......................................................................................................................................... 276 Yuneec International ............................................................................................................................................... 278 Zala Aero Group ...................................................................................................................................................... 279 Zero Zero Robotics .................................................................................................................................................. 280 Zipline ....................................................................................................................................................................... 280

Appendix 1 ........................................................................................... 281

US FAA Section 333 Authorizations for Commercial UAS Operations .............................. 281

Appendix 2 ........................................................................................... 391

French Authorizations for Commercial UAS Operations .................................................... 391


Executive Overview

The Civil UAS Market Outlook

Introduction

In terms of aerospace, the market

for civil UAS promises to be one of

the most dynamic growth sectors for

the next decade, emerging from a

$2.8 billion market in 2017 to more

than quadruple to $11.8 billion by

2026. That represents a 15.5% com-

pound annual growth rate in constant

dollars. Over the next 10 years the

market totals $73.5 billion.

Although consumer systems rep-

resent slightly over half of the over-

all market through the decade, the

fastest growth comes from commer-

cial systems, which surpass con-

sumer systems by value in 2024 and

continue to widen the lead through-

out the rest of the forecast period.

Recent technological advances

from the application of cell phone

technology have enabled the devel-

opment of easy to use, low-cost sys-

tems. That is critical for commercial

applications, which are much more

concerned with cost than the military

market, in which performance is

most critical. Governments are much

more willing than private businesses

to pay for small increments of im-

provement.

As the forecast decade continues,

the maturity of commercial UAS will

continue to develop. Systems will

become autonomous requiring very

little piloting. Pilots will be able to

control multiple systems. Artificial

intelligence will make analysis of re-

sults easier and further reduce costs.

As these technological advances are

made, the promise of unmanned sys-

tems to achieve a decisive cost ad-

vantage will be achieved.

Streamlined regulations are criti-

cal for unmanned systems to achieve

their promise. The pace of regulatory

change in the United States, Europe

and Asia are laying the groundwork

for faster progress.

The FAA’s Part 107 rules on

small unmanned aircraft commercial

operations took effect in August

2016. More than 43,000 remote pi-

lots had been certificated by the FAA

for small unmanned aircraft com-

mercial operations in the eight

months following

The European Aviation Safety

Agency is working to harmonize Eu-

ropean national regulations by estab-

lishing rules for small UAS across

the European Union by 2019. Yet

leading European nations, which

generally have been ahead of the

United States in UAS commercial

adoption, now appear to be lagging

the US efforts to put in place rules

that allow the market to develop.

The Japanese and Chinese gov-

ernments have national initiatives to

try to make their own industries ma-

jor players in commercial drones.

Both countries have major positions.

Executive Overview Page 2


China is the dominant player in con-

sumer drones with more than 80% of

the overall market. Japan has the

largest installed base of commercial

drones thanks to its work in un-

manned agricultural spraying.

Tremendous interest by technol-

ogy leaders such as Intel Corp., Am-

azon, Facebook, Google, Sony, Ver-

izon, Mitsubishi, General Electric

Co., Microsoft, Apple and Samsung

is adding to the speed of develop-

ment by providing financing and an

infusion of new technology and tal-

ent.

An infusion of venture capital is

creating an industry of startups in

both manufacturing and the services

that will be critical to development of

the commercial market.

Technological development is

creating systems that are more auton-

omous and easier to use. An industry

is being created of UAS data analysis

firms. Algorithms are under develop-

ment that will broaden the applica-

bility of UAS in agriculture and other

areas. This continues to broaden the

efficacy of the systems and lowers

barriers to entry in their use.

Civil government promises to

benefit from growing concerns about

border and maritime security in the

United States and Europe. Peace-

keeping operations for United Na-

tions and other countries will further

boost sales. In addition, public safety

use for law enforcement and fire con-

trol is growing.

The consumer UAS market,

which led the development of many

of the capabilities that are now being

applied to commercial applications,

also promises to grow. The greater

maturity of the consumer UAS mar-

ket will limit that growth to rates

well below the explosive growth of

the consumer and civil government

markets. Nonetheless it will continue

to expand thanks to new technologi-

cal developments and a wider range

of product offerings. Moreover,

there promises to be considerable

cross-over between the consumer

and the commercial UAS markets.

Some consumer drones are used for

low-end commercial tasks such as

real estate. Drone manufacturers are

also moving up the value chain to

create more capable, complex sys-

tems able to take on more demanding

commercial work.

There are uncertainties about the

outlook. The speed and size of the

market development will directly re-

late to the specific rules adopted by

regulatory bodies worldwide regard-

ing access to the airspace. The more

restrictive those rules are the slower

will be the adoption by civil govern-

ment and commercial customers.

The longer those rules take to de-

velop for routine access to airspace,

the less valuable the market will be

during the forecast period.

Major accidents or terrorist use of

systems could result in new regula-

tions that would hurt the market. Rel-

atively inexpensive prosumer sys-

tems are improving in quality and

could take the market from more ex-

pensive professional systems.

As the commercial market devel-

ops, it mostly will be based on inex-

pensive prosumer and mini UAVs

and will be much more price sensi-

tive than the governmental market.

Even local law enforcement agencies



will be buying inexpensive mini-sys-

tems and even prosumer systems ra-

ther than much costlier larger UAVs.

While the unit numbers of these

UAVs purchased promise to be sub-

stantial, their value will be a small

fraction of that of the costly, sophis-

ticated systems that dominate the

military market such as Global Hawk

and Predator.

The UAS tables below break

down the forecast between the civil

government, commercial and con-

sumer markets.

Study Parameters

The aim of this study is to exam-

ine the future worldwide market for

civil government and commercial

unmanned aerial vehicles. Teal

Group already covers the military

UAV market in its World Military

UAS Market Profile & Forecast sec-

tor study and in its World Missiles &

UAVs Briefing, which examines the

UAV market on a program-by-pro-

gram basis. The aim of this study is

to focus purely on the emerging non-

military UAV industry.

To begin with, it is helpful to dis-

tinguish at least three elements of the

civil government and commercial

UAV market:

• Civil government UAVs for uses

ranging from border security to

law enforcement to research on

wildlife.

• Commercial UAVs for uses in-

cluding construction, agriculture,

insurance, internet communica-

tions and general photography.

• Consumer/hobbyist UAVs, which

are mass produced, particularly in

China, for low end UAV applica-

tions. These are low cost and may

or may not use a camera. They

are not engaged in commercial

activity.

This study examines each of those

potential markets in turn.

Mini UAVs—We have grouped

most Small Tactical UAVs under 55

pounds into this category. These are

UAVs that are generally small

enough to be launched by a person.

They can be either fixed wing or

quadrotor. Typical examples include

the AeroVironment (US) Raven or

Shrike, the senseFly (Switzerland)

eBee, the Deltair (France) UX5, the

PrecisionHawk Lancaster 5, the mi-

crodrones (Germany) MD4-1000 and

MD-4-200. Obviously mini UAVs

are where much of the activity in the

commercial market will be focused,

due to their cost-effectiveness and

easing regulatory restrictions on the

operation of these systems.

Prosumer UAVs—These sys-

tems are higher-end consumer sys-

tems that are being used for commer-

cial applications. This includes sys-

tems such as the DJI Inspire, the DJI

Spreading Wings family (S800, S900

and S1000) and the Mavic. They will

be used in large numbers in the mar-

ket, but their low cost means the

overall value will be limited.

Small UAVs—Higher-end Small

Tactical UAVs such as the Boeing

Insitu ScanEagle and the Textron

Aerosonde are grouped within this

category. These are generally used

for civil government applications

such as maritime patrol or civil gov-

ernment/commercial applications for

beyond visual-line-of-sight opera-

tions in which lengthy endurance is

needed, such as pipeline or railway

line patrol.

Tactical UAVs—These are

UAVs used for reconnaissance with

endurance of several hours and oper-

ating radius of 200 kilometers or less.

Civil government applications for

this type of system tend to be in par-

amilitary operations such as peace-

keeping. Systems such as the Textron

Shadow 200, the EMT Luna, and the

Leonardo Falco have all been used by

UN peacekeepers.

MALE UAVs—A Medium Alti-

tude/Long Endurance (MALE) UAV

with endurance of about 24 hours and

long-range capability, generally used

for reconnaissance. In a civil role,

MALE UAVs are used by national

agencies such as the US Department

of Homeland Security for border and

or maritime security. These systems

are generally too costly for commer-

cial operations. Typical examples are

the General Atomics Aeronautical

Systems’ Predator, the Israel Aero-

space Industries’ Heron and Elbit

Systems’ Hermes 900.

Low Cost HALE—A High Alti-

tude/Long Endurance (HALE) UAV

with the planned endurance of up to

three months, generally intended for

use in providing internet to areas in

which infrastructure is lacking. Air-

bus, Facebook and AeroVironment

are all working on solar-powered

UAS systems.

Forecast Assumptions

Forecasting is by its nature, an art,

not a science. To stretch this analogy

further, the forecasts in this report

should be regarded as “impression-

ism” not “realism.” The numerical

forecasts in this report may seem to

provide a highly detailed “realistic”

portrayal of the market. The reader

should not be fooled by the seeming

precision of these numbers. By its na-

ture, this forecast is based upon as-

sumptions, summaries, and simplifi-

cations which invariably involve

large margins of imprecision.

Forecasting can be viewed meta-

phorically as a tree. We have a solid

knowledge of the trunk, that is, the



recent size of the market over the past

few years. The future can be viewed

as the limbs- the limbs representing

major alternative scenarios depend-

ing upon regulatory change, techno-

logical developments and shifting

market growth. At one extreme is the

possibility of a major shutdown in the

industry due to major accidents or

terrorist use. On the other extreme is

strong economic growth with very

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