Revenue in the global drone market will grow by up to 34 per cent to reach more than $6 billion in 2017. And, by 2020 the sector will be worth $11.2 billion, according to a new forecast from Gartner.

Through 2020, rapid expansion of drone adoption in industrial inspections will lead this segment to dominate with 30 per cent of the commercial market.

Almost three million drones will be produced in 2017, 39 per cent more than in 2016 (see Table 2).

Dougie the pizza delivery boy has little to fear however. Despite the media fascination with delivery drones, this sub-sector of the market will account for less than one per cent of the industry’s revenue.

While the civil markets (personal and commercial) have been wading through regulation by various governments, drones’ popularity in these markets has not diminished.

The overall drone market will see substantial growth, but the dynamics of the personal and commercial submarkets are very different, Gartner analysts said.

Personal drones will continue to increase in popularity as an affordable extension of consumers’ smartphones for taking photographs and selfies and for other entertainment options.

They can fly a short distance and time, typically no more than 5,000 meters and for one hour, with flight height constrained to within 500 meters. They weigh less than 2 kilograms and are priced less than $5,000.

The market for commercial drones is much smaller, with a significantly higher average selling price in comparison with personal drones. With more countries solidifying their drone regulations, the market is beginning to stabilise, and companies are now buying drones to test and deploy in nearly every industry.

Commercial drones normally have a higher payload, longer flight times, and redundant sensors and flight controllers to make them safer. They are more specialised to a function, such as mapping, delivery or industrial inspection, so prices vary according to these requirements.

“The commercial and personal drone markets are increasingly overlapping, as lower-priced personal devices are being used for commercial ventures,” said Gerald Van Hoy, senior research analyst at Gartner.

“Personal drone vendors are now aggressively trying to position themselves in the commercial market. Recent technological advances blur the lines, allowing personal drones to be used in many special-purpose applications such as surveillance, 3D mapping and modeling.”

Table 1. Personal and Commercial Drones Revenue Forecast, 2016-17 (Thousands of U.S. Dollars)

2016 2017
Personal 1,705,845 2,362,228
Commercial 2,799,272 3,687,128
Total Revenue 4,505,117 6,049,356
Total Revenue Growth 35.5 per cent 34.3 per cent

Source: Gartner (February 2017)

Table 2. Personal and Commercial Drones Units Forecast, 2016-17 (Thousands of Units)

2016 2017
Personal 2,041.9 2,817.3
Commercial 110.3 174.1
Total Units 2,152.2 2,991.4
Total Unit Growth 60.3 per cent 39.0 per cent

Source: Gartner (February 2017)

In commercial markets, new case studies are released regularly, showing savings in both costs and time, as well as highlighting increased accuracy and quality.

Agriculture was considered to be the first big commercial drone market, but pricing and economic dynamics around tighter yields and returns on investment mean that the commercial agricultural drone market is not growing at the pace of other commercial drone markets.

Gartner predicts that through 2020, the high cost sensitivity of the agriculture market will limit drone adoption to 7 per cent of commercial market growth.

Industrial inspections have been much more successful, primarily in oil and gas, energy, infrastructure and transportation. Regulations do not have as much of an impact on the market as was originally thought.

Most inspections are close (within three meters) and low since they are examining equipment that is near or on the ground. Gartner expects the inspection segment to dominate with 30 per cent of the commercial drone market through 2020.

Delivery drones continue to capture the attention of the news media but will not be a major factor for several years. The return on investment has not been proven either in regard to the cost of the drone, operational costs and a single customer delivery.

“Delivery drones will be mired in logistical issues like the time needed to return a drone to its origin point after delivery, and will amount to less than 1 per cent of the commercial market by 2020,” said Van Hoy.

“We expect that delivery drones will begin finding a niche in business-to-business applications first, particularly for internal services within one company where logistics will not be such a big factor.”

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