Despite near-term U.S. budget cutbacks, Unmanned Aerial Vehicles (UAVs) continue as the most dynamic growth sector of the world aerospace industry this decade, report Teal analysts in their latest integrated market analysis.
Teal Group's 2014 market study estimates that UAV spending will nearly double over the next decade from current worldwide UAV expenditures of $6.4 billion annually to $11.5 billion, totaling almost $91 billion in the next ten years.
"The UAV market continues to evolve and become an increasingly global market," said Philip Finnegan, Teal Group's director of corporate analysis and an author of the study.
Civil UAV Market
"And our coverage of the civil UAV market continues to grow with each annual report, mirroring the gradual increase in the civil market itself," said Finnegan. "Our 2014 UAV study calculates the UAV market at 89% military, 11% civil cumulative for the decade, with the numbers shifting to 86% military and 14% civil by the end of the 10-year forecast."
"The Teal Group study predicts that the US will account for 65% of total worldwide RDT&E spending on UAV technology over the next decade, and about 41% of the procurement," said Teal Group senior analyst Steve Zaloga, another author of the study. The larger, higher value systems procured by the United States help drive the relative strength of the US market over the decade.
The 11th edition of the sector study, World Unmanned Aerial Vehicle Systems, Market Profile and Forecast 2014, examines the worldwide requirements for UAVs, including UAV payloads and companies, and provides ten-year forecasts by country, region, and classes of UAVs.
Teal Group analysts already cover the UAV market in their World Missiles and UAV Briefing, which examines the UAV market on a program-by-program basis. Sensor payloads are also treated in Teal's Military Electronics Briefing. The sector study examines the UAV market from a complementary perspective, namely national requirements, and includes both a comprehensive analysis of UAV system payloads and key UAV manufacturers.
UAV Payloads
The 2014 study provides 10-year funding and production forecasts for a wide range of UAV payloads, including Electro-Optic/Infrared Sensors (EO/IR), Synthetic Aperture Radars (SARs), SIGINT and EW Systems, and C4I Systems, forecast to double in value from $2.8 billion in FY14 to $5.6 billion in FY23. However, for the first time, Teal Group forecasts near-term declines in some major electronics market segments – including the ubiquitous gimbaled EO/IR sensor turret.
Instead, some markets will see even greater increases as new programs develop radio frequency (RF) replacements for EO/IR. "Rapidly increasing capabilities for RF sensors are being funded by the U.S. government as potential conflicts shift from clear-skies Central Asia to the more restrictive geographies of Eastern Europe and the Pacific," according to Dr. David Rockwell, author of the electronics portion of the new study. "The SAR market will nearly triple as smaller all-weather sensors take over wide field-of-view ISR from EO/IR."
"The overall UAV electronics market will continue to be the world's fastest-growing aerospace payload market, but not through continued growth of 'the usual suspects' from the past decade. Instead, new sensor programs for current and future air vehicles will result in more unexpected growth spurts and losses. For the 2014 study we have added a number of speculative new programs in the out-years. Wise companies will plan today for growth tomorrow," according to Dr. Rockwell.
UAV Companies
The study also includes a UAV Manufacturers Market Overview that reflects the worldwide UAV market "again continuing as one of the prime areas of growth for defense and aerospace companies," said Finnegan. The new study
reflects the rapid growth of interest in the UAV business by covering more than 40 U.S., European, South African and Israeli companies, and reveals the fundamental reshaping of the industrial environment as UAV technology proliferates worldwide.
Google, Facebook and Amazon
As prime contractors and small companies compete in the dynamic UAV market, they are adopting widely different strategies. "Our overview tracks the widely varying approaches being taken by these key companies, ranging from
outright acquisitions to teaming arrangements and internal development of new UAV systems," said Finnegan.
"It shows how companies worldwide are responding to the growth of the UAV market and the extent to which a new breed of technology companies such as Google, Facebook and Amazon are working to position themselves in the UAV market."