Purchases of Commercial Drones Might Be Hindered by Cost, Public Perception

The Federal Aviation Administration plans to incorporate unmanned air vehicles into the national airspace by 2015, but it may longer for drones to achieve the widespread adoption that manufacturers envision.

Cost of the vehicles, potentially stringent government regulations and public mistrust of drones may keep prospective buyers from purchasing their own, a panel of analysts and industry officials said Aug. 15 at the Association for Unmanned Vehicle Systems International conference in Washington, D.C.

"This probably will not be exactly the timeline that industry would like to see regarding how soon and what types of access will take place over time, but the problems in doing this are very complex, and they touch political, they touch industrial-base, and they touch a lot of different issues,” said Ron Stearns, research director at G2 Solutions, an aerospace and defense research company based in Kirkland, Wash. “Things need to be proactively resolved over time. There needs to be proof and there needs to be comfort as we move forward."

Rather than bursting out of the gate at full speed in 2015, it is likely the integration of drones into domestic airspace will happen gradually in the following years, Stearns said.

Over time, regulations will allow for an increase in maximum takeoff weight and expand the radius in which UAVs can operate. However, Class B and C airspace — the air traffic areas around the busiest airports — will likely be restricted into the 2020s, Stearns added.

"The one elephant in the room here is public opinion and privacy concerns, and it's the quantitative and illogical that I think can turn the apple cart over,” Stearns said, urging industry to talk about positive, non-lethal uses for drones such as monitoring wildlife.

While there will be a boom in UAV purchases once systems are cleared for domestic use, it might not be as big as some analysts predict, said Mike Blades, senior industry analyst at Frost & Sullivan. In many industries, a fee-for-service model will dominate the market.

For instance, AUVSI’s economic impact report estimated purchases of about 590,000 commercial unmanned air systems for the precision agriculture industry by 2021.

That number is a little high, Blades said. He estimates a total of 410,000 sales if every large farm, one in 10 small occupational farms, and one in 20 small non-occupational farms buy a UAV. "At that point, you would just need replacements,” he said.

Companies that offer fee-for-service payment plans could cash in on this market because the upfront cost of drones will be prohibitive. Additionally, many farmers will not need UAV data 24/7, Blades said.

When farmers need an unmanned system, they can rent one, he said. “When you're done, take it back, they give you the information you need, and you're done. You don't need to operate it.”

Eric Mathewson, Boeing’s director of business development for unmanned systems, agreed that model might make sense in certain business cases. His family owns a farm where unmanned systems could be useful in tracking cattle.

“With thousands of acres to cover and thousands of cattle, it becomes kind of difficult to actually get out there and see where the water is, where the feed is," he said.

John Cherbini of 3D Robotics predicted precision agriculture will be an optimal area to grow his business, which sells build-your-own autonomous UAV kits and provides users with training. The challenge is packaging data so that it is valuable to the customer, he said.

“We're all still trying to figure out what farmers or agronomists will pay for. We have an idea. We've done a lot of flying over vineyards in the Napa Valley of California. We've been flying over ranches out there to do digital elevation models,” he said. “At this point in time, it's a matter of providing that data in a robust, reliable, easy-to-use fashion to the end user."

If fee-for-service UAV businesses become popular, that will give the sensor industry an opportunity to sell modular sensors that can be plugged into different platforms, allowing different uses for different markets, Blades said.

The sensor industry will also benefit from sales to the law enforcement community, which will need various types of expensive, advanced sensors for their remotely piloted aircraft, he said.

Blades estimates that sales of 6,000 UAVs would saturate the public safety market, including 4,000 sales to law enforcement and 2,000 to first responder groups.

Police departments currently own about 2,000 helicopters, he said. After UAVs are introduced into the national airspace, they will be able to take over some of the surveillance missions currently done by manned rotorcraft.

Those drones are likely to be bigger and have heavier payloads than the ones purchased by commercial industries. Law endorsement agencies are “going to want more endurance as well, and that's going to cost more,” Blades said.

With so many small UAV makers ready to sell their products, and large defense contractors hoping to make up for shrinking sales to the military, the market could become congested.

Not all commercial UAV manufacturers will survive the next decade, Blades said. Unless a small business has a unique technology, it will likely have to partner with the defense industry or merge with others.

The FAA is planning to announce by the end of the year six test sites where drones will be flown to collect data and help shape regulations.

The location of those test sites will be a significant driver for commercial markets, said Blades, who added that he had talked to industry officials who were worried about possible negative effects of not having a nearby site.

Stearns agreed the test site locations could affect the UAV industry. "That's where you're going to have a lot of your proof of concept. You will have a body of data and knowledge and flight hours, and you will have a number of experiments, and you'll have to deal with interaction in airspace."

Topics: Robotics, Unmanned Air Vehicles