Dajiang Innovation dominates the hardware market, commercial drones are developing rapidly
Unmanned aerial vehicles (UAVs), commonly known as drones, are rapidly evolving from amateur photography and video enthusiasts and gaining powerful commercial applications. The benefits that drones can bring to multiple industrial sectors are growing. Consumers are most concerned about their use in photography and video, and many video production companies now rely heavily on drones to shoot aerial footage. However, from the fields of agriculture, energy, insurance to mining, you can benefit from the use of drones.
In the middle of 2018, we expect the drone market to grow by 45%, mainly due to the faster growth of the commercial sector. Due to price declines and technological innovations such as collision avoidance, autonomous flight mode, origin return and first person perspective (FPV), commercial applications are growing, making drone systems relatively easy to use in a wide variety of applications.
As far as participants are concerned, Dajiang Innovation dominates the hardware market and accounts for two-thirds of the entire market. Due to the high concentration of the hardware market, many vendors have shifted their focus to providing software solutions and services to help companies get the most out of drone operations.
Commercial drones have a wide range of applications. For example, in the agricultural sector, they can monitor crop variability, determine the optimal level of irrigation, and use pesticides and fertilizers efficiently. Compared with traditional methods, results can be obtained faster, saving time and input costs can increase farmers' output, income and profits. Drones have also been successful in many other industries.
UAV delivery is often positioned as a promising area for drone deployment. Several companies are testing the potential from parcel delivery (Amazon Prime Air) to providing emergency support services (such as Flirtey, Zipline), which can be used to deliver supplies in remote or hard-to-reach areas. Due to availability, resource or terrain difficulties, this is critical in the case of conventional land or air supply difficulties. The following is a brief overview of the impact of drones in various areas.
Despite the increasing use of certain industry sectors, regulatory issues remain a stumbling block to the wider deployment of drones in the commercial sector. Regulations vary from country to country, but most current operators of drones always have "line of sight" contact with drones. This limits the distance that a drone can fly from a user or base. Mandatory registration of drones over a certain weight is also a requirement in many countries.
We believe that in the business sector, companies in the media, entertainment, agriculture and construction industries are driving value. Looking ahead, the use of commercial drones in emerging areas such as insurance, telecommunications and delivery will increase, and drones as a service model will increase. According to Counterpoint Research, the commercial drone hardware market is expected to reach around $700 million by 2020, a compound annual growth rate of 33%. The average selling price (ASP) is almost twice that of the consumer drone field.
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