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Connected Drones… Seriously
The capability of drones to carry out an increasing range of tasks, and to make some existing processes simpler, cheaper and more effective, means that there is a wave of innovation and development happening around the world. Much of the innovation concerns the ways drones are connected – to each other, to the remote "pilot" and to other systems for control and use of data gathered from the drone. There are examples of drone-based services for monitoring, surveying (and surveillance), precision agriculture and logistics in many industries, and for environmental and humanitarian activities. Most intriguing of all, perhaps, is the potential for drones to act as nodes in public communications networks – extending the concept of battlefield airborne communication to the permanent delivery of connectivity in unserved or underserved locations.

This industry has been – and still is – looking for clear and sympathetic regulation of commercial drone activity. In particular, the U.S. FAA's views have been eagerly awaited: a draft was released in February 2015 following a period during which there were a few case-by-case exemptions granted to a blanket ban. Such regulation has a big influence over the fate of drone hardware manufacturers, component makers and a raft of providers of software platforms and services who are developing offers in the expectation of market take-off.

Despite the rapid progress in the drone market in the last two to three years, in many respects there are still more challenges than solution, still more questions than answers. But there is progress being made in many areas – particularly on the technology side and in clarifying market structures and value.

The major brake on the development of commercial drones is regulation: We have waited a long time for the FAA to produce its draft rules (though several exemptions from current restrictions in the U.S. have been granted), and most other countries' regulations are similarly restrictive. Until the regulations are clear, and resolves issues relating to autonomous flight and control beyond line-of-sight, commercial drones will not fulfil their potential.

There may be too many technology companies chasing too small a market for the next five years and we expect to see the start of consolidation in 2016 as drone hardware and, particularly, software startups' early stages funding runs out. The experience of Octoblu and its acquisition by Citrix – which surely has ideas much wider than drone management – is a lesson. There are lots of good technology developments happening out there, and they won't go to waste, but there will be fewer drone-focused tech companies standing this time next year.

Connected Drones… Seriously examines the emerging market for commercial, connected drones. It describes the emerging value chains and functional stratification of the technologies that make up a modern connected drone. It examines the most significant issues facing the commercial drone sector – in particular related to connectivity – and summarizes what is happening in the development of drones as network nodes. It reviews the supply-side landscape of the industry, and profiles 14 companies – from very small start-ups to giant technology corporates – that are working in the connected drone space.
Sample research data from the report is shown in the excerpts below:
Table of Contents (hri0415_toc.pdf)
Specific roles in the industry are becoming clearer as the small-drone industry develops from a hobbyist base to a commercial and professional market, as the military drone industry looks to expand into commercial opportunities and as new applications for drones are developed. Hobbyists initially bought drones to fly them; now they are much more likely to want the drone to be an enabler of some other activity, often involving photography or video filming. And the photography/videoing is also itself a means to an end for many users. Furthermore, the vertically integrated drone solutions typical of the military approach aren't necessarily right in a more price-sensitive, open-culture civilian world.
[click on the image above for the full excerpt]
Companies profiled in this report include: AeroVironment Inc. (Nasdaq: AVAV); Airware (Unmanned Innovation Inc.); The Boeing Company (NYSE: BA); Da-Jiang Innovations Science and Technology Co. Ltd. (DJI); DreamHammer Inc.; DroneDeploy (Infatics Inc.); Facebook Inc. (Nasdaq: FB); Google Inc. (Nasdaq: GOOG); Matternet Inc.; Northrop Grumman Corp. (NYSE: NOC); Parrot SA (Euronext: PARRO); PixiePath Corp.; SkyCatch Inc.; and Skydio Inc.
Total pages: 24
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