About Maestro

How much can commercial drone pilots make? What industries pay the most? And more.

Improvements in drone products and regulatory changes have caused a wave of photographers and other professionals to become commercial drone pilots. This may mean joining a services firm or going at it alone as a “droneprenuer”. The rise of drone service providers in the early days saw a few “winners” scaling to form larger DSP businesses (CyberHawk, SkySkopes, DroneBase, etc), while others have turned their piloting skills into a profitable small business.

However, that is not always the case. There have been significant pressures being put on service providers. Aloft’s Joshua Ziering put it well in an earlier article, with many of these trends boiling down to low barriers to entry, and enterprises slowly moving drone operations in-house.

But the question remains, just exactly how much money are DSPs making, which industries are the most lucrative and how do pilot networks factor in? We pull apart data from our 2020 survey to provide some insights below.

How Much Do Drone Service Providers Make?

We asked 468 drone service providers questions about their drone operations, revenues, challenges, and expectations. Our respondents tend to be made up primarily of small service providers, with more than half being a sole proprietorship, and 20% of those as a part time business. The survey also collects respondents from larger DSPs, but they made up less than 10% of respondents. 

The most telling question has always been how much revenue drone services can provide. A graph of responses is provided below.

The vast majority of service providers made less than $50K USD, below the $68K median household income in the US. What is more concerning is this figure hasn’t moved much over the years. The same question in 2018 revealed that 78% of DSPs made below $50K. So our 2020 data shows some improvements, mostly in the 100 – 500K field, but not a major shift.

At the same time, we have seen the prices of drones purchased for commercial purposes increase over the years, as brands have segmented products to charge higher prices for commercial users. Putting this together, we have certainly seen commercial pilots get squeezed.

We speculate that shifts in our survey demographics (younger and from drone programs themselves) also suggests that a few of our respondents in prior years making under $50K have left the industry entirely to retire or enter another industry. But survey data isn’t a great factor to measure market exits, so we’ll leave it as speculation.

Identifying the Right Industry

So if you are looking to become a commercial drone pilot, or looking to pivot in your service offerings, just what industries are likely to net over $100K in revenues?

Below we provide a table looking just at what services survey respondents making over $100K provided.

Top 3 Drone Services Making Over $100K/Year

  1. Surveying, mapping, etc
  2. Aerial photography and/or videography
  3. Utilities infrastructure inspection or monitoring

We have seen Surveying and Mapping rank at the top of this list since we started collecting data back in 2016. That makes sense considering the complexity of capturing highly accurate data, and often specific hardware and software to enable high-value deliverables.

Aerial photography and/or video is a general catchall, but is mostly speaking to creative applications. Many in this sector will have experience working with ground-based cameras, and likely a lucrative client list from their past work.

Lastly, we have Utilities Infrastructure Inspection/Monitoring, which swapped places with Aerial Photography and/or Video. This makes sense considering Utilities firms are also the industry’s largest spenders on drones, drone software and services. However, this income source will be impacted by these firms internalizing much of their drone operations. While that could be a threat to a service provider, they may also be at the top of the hiring list for these firms in the years to come.

The Role of Drone Pilot Networks

We have seen the rise of drone pilot networks like DroneBase, Droners.io and more where pilots can find jobs via an online marketplace. Starting with our 2020 survey, we began tracking the role these pilot networks play in driving revenues for commercial pilots. Discussions on online forums generally suggest that jobs offered through these networks are at such low prices, that they are helpful for getting experience, but not much else.

Our survey data suggests that this assessment is generally right, with pilot networks being a major source of income for just 10% of respondents, and supplemental income for another 20% of them.

Overall, if you are looking to start up as a commercial pilot, look at pilot networks as a starting point, but don’t rely on them for your core income. Additionally, we are seeing some structural shifts among these pilot networks, which is seen when we start cutting this data by how long the pilot has been operating, and others, but that is for another discussion.

Participate in the 2021 Survey

I hope this provided some transparency to service provider revenues, and what industries are the most lucrative for drone services. We are once again running our annual market survey and would love for you to participate and share your experiences. Participating will get you a summary of the findings and enter you for a chance to win a $400 gift card.

You can participate here: https://bit.ly/DASurvey_2021

Where to Find More Insights

The post Finding the Money for Service Providers appeared first on Drone Analyst.


Have your voice heard in the industry’s longest running annual survey

We just announced our fifth Drone Market Sector Survey, established to provide clear benchmarks for the industry. This survey is the online research portion of our upcoming 2021 Market Sector Report (to be released in September), and will provide a comprehensive look across drone purchases, service providers, business and public agency buyers and software services.

The 2021 survey is more comprehensive than ever before, by building on top of our previous efforts and diving deeper into:

  • How new autonomous features are impacting purchases and adoption
  • The impact concerns (and rules) around Chinese-made drones have had on drone purchases
  • How adoption, spending and usage differs across key end user segments

Take the brief 10-minute survey here: https://bit.ly/DASurvey_2021

As an incentive for participation in the survey, respondents have an opportunity to:

  • Receive a free summary report of the research results, a $95 value
  • Enter to win one of two $400 gift cards

About Our Annual Report

If you’re not familiar with our Market Sector Reports, here is a quick refresher. Started in 2016, these market sector reports have provided concrete data about who is buying and using small unmanned aircraft systems (aka drones). While it has primarily focused on hardware purchases, the survey has evolved to track the complex nature of the drone industry.

In 2017, the report expanded to better understand drone service providers and business buyers. In 2018, improvements were further made to measure maturity of drone programs and actual usage of drones. In 2020, changes assessed the impact of COVID-19, US-China trade war and the origins of corporate drone programs.

This year’s report will again make improvements by assessing the adoption and benefits of autonomous drone solutions, better measure trends across key industry segments and understand the usage of different software categories.

What is Covered in the Survey?

  • Who’s buying what types of drones from which makers at which prices and for what uses?
  • How large are drone-based service providers, what is the market share of pilot networks and how and where are they positioning themselves?
  • What most concerns businesses that perform drone-based projects and why?
  • How much are service providers, business buyers, and public agencies using flight management and data analytic software for image-based projects?

Our previous studies have found that more consumer drones are being used for professional use than ever before, the U.S. market is flooded with service providers and remote pilots but very few make enough money to sustain a full-time venture, and film / photo / video dominates both the hobby and professional uses of drones. This year’s study will continue to challenge these insights and explore new topics like the role of autonomous solutions.

Who Should Take the Survey?

  • Individuals or organizations who have purchased a drone in the past 12 months for any reason
  • Commercial drone service providers
  • Businesses, enterprises, and public agencies that perform drone-based operations

Why this Study?

We believe the consumer and commercial drone market needs this annual benchmark study. There is a lack of objective information on the drone industry. We find an absence of credible market-based research and little understanding of the difference between large industry forecasts and actual buyer adoption rates – which we have already seen diverge significantly from reality. This study will clarify much of that.

The survey will be open for four weeks, and results will be available in September.

You can take the brief 10-minute survey here: https://bit.ly/DASurvey_2021

The post Participate in Our 2021 Market Survey appeared first on Drone Analyst.


Amidst Global Tensions and A Surge of New Manufacturers, Open-Source Has Risen as a Key Winner

With much of the industry discussing the pressures on DJI, rise of Blue sUAS offerings such as the Skydio X2 and the promise of autonomous drones, there has been one consistent force driving many of these larger trends. That is the rise of drones relying on open-source technologies, and the strengthening of open-source protocols themselves.

In this analysis, we break down data and share insights into the trajectory of the open-source drone ecosystem, and explore the impacts of open-source in the coming years.

What is Open Source?

Open-source technologies are not a new element of the drone industry, with the two main open-source flight control projects – ArduPilot and PX4 – being started in 2009 and 2011. These open-source projects predate the availability of cheap, ready-to-fly drones in 2013 and establishment of a legal framework for commercial drone operations in the US in 2016

Open-source technologies broadly refer to projects with a free-use license (note these licenses are not created equal) that are openly and publicly worked on by developers. The projects of interest may cover everything from flight control software and communication protocols to battery management systems.

Everything works around the flight control systems, with ArduPilot and PX4 reigning king among consumer and commercial imaging products. Chris Anderson and Jordi Munoz created Ardupilot, and they also went onto creating 3D Robotics. The PX4 Autopilot traces its origins back to a team at ETH Zurich led by Lorenz Meier, who later founded Auterion. 

The critical difference here (besides the literal code) is the open-source licensing between the projects, each with its pros and cons. ArduPilot holds a GPLv3 license, while PX4 uses a BSD-3.

There’s much to say about the differences between both licenses. However, in summary: 

GPLv3 allows for commercial use, modifying, distributing the code, the authors cannot be held liable for damages, and the users cannot sublicense the original work or any derivatives. In addition, you need to include copies of the original software and disclose any significant changes made to the codebase (under the same license). You are also required to display copyright. Lastly, if you are distributing the software as part of a product or service, you must include the information necessary to modify and reinstall the software.

BSD-3 also allows for commercial use, modifying, and distributing the code or derivatives. The authors cannot be held liable for damages, and the users cannot sublicense the original work or derivatives. You can place a warranty on the licensed software. You must include the original copyright and the full text of the license. The main difference is that with BSD-3, you are not required to disclose any derivative works of the source code or include information on modifying and reinstalling the software. One crucial factor is the trademark. You cannot use the original company or its members to endorse your work unless given explicit permission.

Disclaimer: This is only a summary and our interpretation of the full text of the licenses. No information listed here is legal advice.

While these two systems have their differences, they can often be used interchangeably with other open-source technologies (such as MAVLink communications protocol) even if they sit in the “opposite camp.”

Alongside the flight control software, the open-source community has built a variety of additional open-source technologies, a few of the more popular ones are:

  • MAVLink communications protocol (Drone to RC protocol and allows 3rd party apps to communicate with the FC)
  • QGroundControl control station software for MAVLink based drones, that runs indiscriminately on any mobile, or desktop OS.
  • MAVSDK the best and easiest way to interface with MAVLink based vehicles via a unified, simple to use and cross platform API

We mapped out the ecosystem of key open-source projects in the image below.

These open-source technologies enter the market through hardware standards published by Pixhawk, and adopted by manufacturers in their products. he development and community management of Pixhawk happens under the Pixhawk Special Interests Group (SIG) and all PX4-related open source projects are facilitated by the Dronecode Foundation. Despite ArduPilot leaving the Dronecode Foundation early on, the Pixhawk hardware standards and MAVLink are compatible with ArduPilot based drones. In this way, open-source flight controllers are interchangeable, with the key industry “standard” here being the MAVLink protocol.

Why Open Source Now?

There are two key elements driving the push for open-source drones, which are broadly fueled by geopolitical tensions between the US and China and the search for a true DJI competitor. These two elements are the rise of new (particularly American) hardware players and nationalistic procurement policies in the US.

In the case of new hardware players entering the market, we are seeing a multitude of small organizations trying to come to market quickly and capture market share. Considering the cost and complexity of developing a proprietary flight controller algorithm, it is much easier for these players to buy common flight controllers with open-source software. This is true for all new hardware firms outside of Skydio, whose $170 million Series D round puts them ahead of the pack in terms of capitalization and investment in core R&D. Even in the case of Skydio, they have adopted MAVLink and QGroundControl for government operators, to address requirements in our second element – new procurement policies.

As we have covered previously, the Blue sUAS Group has caught a lot of attention and has supported the birth of a new group of US-made drones. As part of the DIU’s Blue sUAS solicitations, they have continually required the use of open-source technologies. This began by requiring an architecture “built around an open source protocol” in Blue sUAS 1.0 solicitations to more specifically requiring “open source command and control protocols” in Blue sUAS 2.0 solicitations, which we should hear results from this year. A more recent solicitation for an all-purpose “Soldier Robotic Controller” called specifically for MAVLink compatibility, signalling that the MAVLink command and control protocol is becoming standard.

It’s fascinating to see the US military move quickly on open-source technologies, and speaks to the influence of the Defense Innovation Unit in changing US DoD procurement culture. It also speaks to the benefits of Open-Source projects for large enterprise users. With strict enforcement of standards, large enterprises can test or deploy multiple systems nearly interchangeably. Vetting of cybersecurity risks can similarly be streamlined, as code is published and commonly tested before procurement.

Size of Open-Source Commercial Drones

So how well adopted are open-source technologies in the commercial drone segment? This has been hard to measure perfectly, as drone brands do not always have an incentive to publicly recognize their use of open-source technologies. Additionally, the industry’s dominant drone manufacturer, DJI, develops their own proprietary systems, pushing many open-source projects to military or higher-end niches of the market.

Despite all these caveats, known drone brands leveraging open-source technologies account for 16% of all commercial drones sold and over half (60%) of all non-DJI drones. This shows the oversized impact open-source technologies are having on the commercial market.

Table: Platform Market Share (By Units), Commercial Drones

Platform Overall Market Share Adjusted Market Share
(Excluding DJI)
Proprietary/Closed 84% 40%
ArduPilot 1% 3%
PX4 6% 24%
MAVLink Only 9% 34%
Platform Market Share (By Units) for Commercial Drones. Brands solely using MAVLink mostly have a mix of closed and open drones, so are overestimated here.  Additionally, our data only captures “productized” drone models, and removes DIY and customized products which are also likely leveraging open-source technologies.
Source: DroneAnalyst 2020 Market Sector Report survey of 913 drone buyers.

As the market becomes more competitive, we similarly expect the market share of open-source drone brands to increase, which we’ll continue to track in our annual survey. 

The data highlights that the commercial drone industry has moved towards the PX4 flight control stack. That doesn’t mean PX4 is the preferred open-source stack for all market segments. ArduPilot and other projects play a significant role amongst some commercial adopters, hobbyists, racing, and other communities.

What’s Next?

With open-source powered-drones rising alongside many new hardware brands, it’s important to think about the larger implications these technologies will have on the industry.

Around the corner, we expect to see a surge in slightly larger, diverse, US-made and MAVLink compatible airframes in response to the Blue sUAS 2.0 solicitation. Most notably this will be seen in the “drone platform” category where DJI M300-equivalent airframes such as the FreeFly Astro, Ascent Aerosystems Spirit and Inspired Flight IF1200 exist. These platform-style airframes are perfect for leveraging open ecosystems and expansions of open standards to modular payloads. The more open nature of the 2.0 solicitation also spells for a more diverse set of these airframes.

We are also seeing deeper integration and capabilities among a more focused niche of the open-source ecosystem built around Auterion. Started in 2017 by founders of PX4 and Pixhawk, Auterion develops additional proprietary software that extend the capabilities of open-source drones for large operators. This primarily consists of their Auterion Suite software that helps control and manage fleets of compatible drones but has extended to certain hardware components as needed by hardware manufacturers.

This more focused ecosystem of open-source players is critical to unlocking integrated solutions for enterprises and tapping into increasingly autonomous deployments.

These open-source systems are spreading to more advanced drone operations as well. A recent Dronecode report highlighted firms authoring the most commits to their open-source tech stacks, including companies working on delivery (Volansi), surveying (Wingtra), tethered solutions (Elistair), UTM (AirMap) and more. What may be more interesting is that underwater drone developer Blue Robotics was the fourth largest contributor (by commits), signalling that these UAV-first technologies may have broader appeal in the robotics industry.

All that goes to show that the drone open-source community is not just here to stay but has shaped the industry from its very beginning. While it has originally played a role among manufacturers, developers and hobbyists, we are starting to see a broader role and trust in open-source technologies for enterprise.

Thanks to Dronecode Foundation’s program manager, Ramon Roche, for his help throughout my research process and contributions to the open source community.

Where to Find More Insights

Looking to dive deeper into the open-source community? The Dronecode Foundation’s annual PX4 Developer Summit is just around the corner. You can learn more about the event here.

Looking to learn from recent DroneAnalyst reports? A few recent topics include:

The post The Rise of Open-Source Drones appeared first on Drone Analyst.


New DroneAnalyst Research Dives Into Market Size in Initial Hardware Sector Report

The history of the drone industry is also the history of hype and oversized forecasts. Whether that be the tale of Lily Robotics or Goldman’s $100 Billion market estimate by 2020, we’ve seen it all. And it’s understandable, drones are a new, unique piece of technology and it’s hard to predict how consumers and enterprises will adopt them. Making matters worse, there are only a small handful of public companies who publish financial data, and these firms make up just a small slice of the market.

While historically DroneAnalyst has shied away from making market estimates, with new datasets and processes, we are now confident in our own market size study, which we released in our new Drone Hardware Sector Report. This report combines DroneAnalyst’s survey data, never before used customs data, public financial data and more to provide what we believe is the most accurate hardware sector study to date.

We dive into the size of the drone market, and the performance of industry leaders like DJI and Parrot below. These are just a small sliver of the data and insights available in the entire Drone Hardware Sector Report.

Sizing the Drone Market

Our analysis centres on four key market sectors – Creative Professionals, Agriculture Spraying, Enterprise Imaging and Consumer Imaging – and leaves out many other segments which are either too small, or in the early stage where forecasting growth is comparatively inaccurate. We have also left out the military segment, although we have recently detailed trends in US military spending on sUAS for anyone curious.

We found that these four sectors totalled up to $3.5 Billion in hardware sold in 2020. This was a large 46% jump over 2019 as COVID-19 saw surges in new sectors, and the consumer imaging segment recovered from a two-year decline. The full forecast is in the image below.

What is maybe most noticeable to the English-speaking world is the large bump in Agriculture Spraying drones in 2020. What started as an interesting niche of the market, is now rising to become a market in itself. With the surge in spraying drones used to combat COVID-19 (despite doubts about their efficacy) and weakening of Chinese export restrictions, the Agriculture Spraying segment saw a massive, 135% uptick in 2020.

More broadly, we expect to see high, continued growth in the Enterprise Imaging and Agriculture Spraying sectors, while the Consumer Imaging and Creative Professional sectors slow down. Our forecast accounts for a variety of factors, including changes in regulations, technology and form factors, which will accelerate or slow down growth depending on how quickly they come into place.

Does that size seem a little low? Many will note that we had seen high revenues from firms such as DJI in the years prior. In our broader study, we explore this in much more detail, but to put it simply, what we saw in 2020 is a recovery period sped up by COVID-19, not continued growth. We explore this idea in more detail by diving into our estimates of DJI revenues and financial filings from Parrot below.

A Resurgent DJI, Pivoting to the Commercial Market

DJI last shared data on their revenue figures all the way back in 2017, and has since been tight lipped on their financial figures. In the mean time, we have heard news of corruption and layoffs, which tells the story of an organisation under pressure.

With our new datasets and methodology, we are happy to start filling in the gaps, and provide estimated revenues for DJI going all the way back to 2017. Additionally, we have split out DJI’s hardware revenue by market sector, accounting for consumer drones sold to enterprise users, and provided these findings in the image below. It’s important to note that our research only includes drone hardware sales, and we assume that DJI’s handheld camera products and others are driving new revenue sources for the firm.

From our data, we had seen increasingly weak sales numbers in the Consumer Imaging space until the end of 2019. At the same time, DJI’s Enterprise Imaging and Agriculture Spraying businesses have grown rapidly. Despite DJI’s overall strength and dominance in the market, they are comparatively weaker in the high growth enterprise sectors than the consumer segment – where they control 94% of the market.

Diving Into Parrot’s Financials

We can explore these larger market trends through Parrot, a long-time market player who has started to pivot their business and entire supply chain to focus on the commercial and military segments. Through this pivot they have seen the fall-off of the consumer drone segment and the rise of the competitive Blue sUAS segment, including a shift to a US-based supply chain. We’ve aggregated their quarterly financial data, converted to USD and provided a glimpse below.

We similarly see a slide in overall hardware demand from Parrot, most notably in the Consumer space (which is selling through existing stock of old units) and Commercial sector, which has been much affected by increased competition and supply chain shifts.

The Blue sUAS / dual imaging quadcopter segment their Anafi USA exists in is highly competitive (and increasingly so), with offerings from Altavian. Autel, Brinc, DJI, Teal, Skydio and Vantage. Which raises the question of why are new manufacturers pigeonholed on narrow product segments, and the overall state of hardware competition.

The State of Competition & Future of the Market

In our recent post on the industry’s reliance on DJI, we provided a table diving into which product segments DJI faces competition on. This highlights both that DJI invented many of these segments itself, and there is no competition across the majority of the industry. In fact, the product segments where DJI faces competition make up less than 20% of their sales (by units).

DJI Product Segment Price (USD) Competition
Mini 2 Consumer <$500 None
Mavic Air 2 Consumer $800 None
Mavic 2 Pro/Zoom Prosumer <$2,000 Strong: Autel, Skydio
Mavic 2 Enterprise Zoom/Dual Enterprise >$3,000 Strong: Autel
Mavic 2 Enterprise Advanced Enterprise $6,500 Strong: Altavian. Autel, Brinc, Parrot, Teal, Skydio, Vantage
Phantom 4 RTK Enterprise $6,200 None
Matrice 300 RTK Enterprise >$13,000 Nascent: FreeFly, Inspired Flight
Matrice 600 Pro Enterprise $5,700 Nascent: FreeFly, Inspired Flight

Instead, we’ve seen competitors dial-in on segments where they may have competitive advantages or unique hardware designs in itself (transitional VTOL, coaxial, etc). While these segments may be growth areas of the market, the large amount of competition will stifle these firms’ potential. We’ll likely see this change as the market corrects, with recent announcements of FiMi and Hubsan joining the sub 250g category, and current enterprise players adding new models.

In fact, this is a large reason why we are releasing the Drone Hardware Sector Report, to help correct mismatches in the marketplace and offer transparency to stakeholders as to which models are selling. With large, privately owned Chinese players, it can be hard to assess which segments can provide growth opportunities, and which will die off. If you’d like to learn more about the report, and it’s additional insights, you can download a sample including a Table of Contents and Methodology here.

Where to Find More Insights

The post How Large is the Drone Market? appeared first on Drone Analyst.


Despite geopolitical tensions and security concerns, the drone industry’s reliance on DJI remains firm. We explore why.

While headlines have focused on DJI drones being “banned” or “blacklisted” from the US market, many following the industry will know just how little impact these US government actions have had on the majority of drone sales and DJI’s market dominance. While it is worth going into the nuances of DJI’s Entity List addition – which is not a ban – we are focusing this article on how DJI has reacted and the role it plays in the industry.

Despite heightened pressure and focus on DJI, it has continued to behave in the most “DJI” fashion – having launched its first FPV drone, introduced the $999 Air 2S to compete with its own $1600 Mavic 2 Pro and pushed into the EV automotive rush. On the commercial drone side, DJI has started to ship its Mavic 2 Enterprise Advanced drone and L1 and P1 surveying payloads that were launched shortly before their Entity List addition toward the end of December 2020.

DJI’s Market Position

All this normal DJI behavior emphasizes the fact that DJI products are still available, and DJI is still the most-selected brand in any drone segment that it participates in.

While much attention has been paid to how the Entity List addition may influence enterprise customers, we have yet to see a large impact. The apparent reason for this is that DJI products are best suited to address the motivations behind drone purchases, and most market segments lack real alternatives.

The large number of new entrants with all-in-one dual thermal/RGB imaging drones underscores the lack of real alternatives in other segments. With five Blue sUAS entrants – Skydio, Vantage Robotics, Altavian, Teal Drones and Parrot – in addition to Autel’s Evo II Dual and Brinc’s Lemur, this space is getting crowded. However, many of these firms continue to struggle to reliably deliver units, continue to rely on Chinese components and (except for Autel) are roughly 2x the price of a Mavic 2 Enterprise Advanced. And this is the only segment where DJI faces significant competition, as competing brands struggle to compete with DJI’s larger M300 enterprise platform, dedicated surveying offerings (P4 RTK) and more affordable consumer offerings (Mavic Air 2, Mini 2). The competitive landscape can be viewed in the figure below.

DJI Product Segment Price (USD) Competition
Mini 2 Consumer <$500 None
Mavic Air 2 Consumer $800 None
Mavic 2 Pro/Zoom Prosumer <$2,000 Strong: Autel, Skydio
Mavic 2 Enterprise Zoom/Dual Enterprise >$3,000 Strong: Autel
Mavic 2 Enterprise Advanced Enterprise $6,500 Strong: Altavian. Autel, Bring, Parrot, Teal, Skydio, Vantage
Phantom 4 RTK Enterprise $6,200 None
Matrice 300 RTK Enterprise >$13,000 Nascent: FreeFly, Inspired Flight
Matrice 600 Pro Enterprise $5,700 Nascent: FreeFly, Inspired Flight

Talking about DJI’s market domination through competition in narrow product categories belies its true market position. Truthfully, DJI has invented the majority of these product categories themselves, and it will take time for youthful competitors to catch up and compete across every segment.

Why Customers Choose DJI

This brings us back to why customers choose DJI in the first place – its products simply best address the reasons users buy a specific drone. We are still in the early days of the drone industry, and purchasing factors match that. Customers that we surveyed in our 2020 Drone Market Sector Report selected Reliability, Flight Time and Price as their top three purchasing factors, reflecting that drones already provide value but organizations need to get units out there to expand operations safely, reliably and in ways that don’t require heavy investments. This last emphasis on cost is critical when considering that drone programs have primarily begun from the bottom of an organization instead of from heavy management buy-in (and spending), and other platforms such as the five Blue sUAS can cost three to five times as much as a comparable DJI platform.

Intriguingly, customers chose “trust in the brand” as their fourth most important purchasing factor over things like flight automation, payload capabilities, data security and more. While industry outsiders may see this as a weak point for DJI due to their Entity List addition, the state of competitors mean that customers’ second or third choice are often younger companies with unproven capabilities.

Security Fact, or Security Fiction?

This similarly takes us to concerns about DJI’s security practices and claims made about the security of data captured by DJI drones. We have long seen general concerns from agencies such as the DHS (US Department of Homeland Security) and other US agencies about drones made in China, which led to the grounding of fleets from 3DR, DJI and others by the US Department of Interior and US Army and seen heightened restrictions across Japanese governmental agencies.

Despite these bans and concerns, there is no public evidence that DJI is purposely or intentionally conducting espionage with its products or installing backdoors. To the contrary, there are several reports and audits by cybersecurity experts and US government agencies that have found no evidence of inappropriate data transmission. We provide an overview of the more recent reports and links to the full reports below.

Title Performing Org Products Covered Publication Date Findings
DJI Cybersecurity Assessment FTI Consulting DJI M210 RTK, P4 RTK, Mavic 2 Pro, Mavic Mini and most software applications September 2020 “…DJI offers options for configuration and operation that can both reduce and eliminate the generation and provision of data externally.”
Risk Assessment: Detailed Report and Mitigation Plan Booze Allen Hamilton, PrecisionHawk DJI M600 GE, Mavic 2 Pro GE, Mavic 2 Enterprise Updated March 2020 “Similar vulnerabilities are consistent on other platforms, and not specific to any individual manufacturer”
Aviation Cyber Initiative UAS Information Security Risks Limited Scope Test & Evaluation INL, a US DoE National Laboratory operated by Batelle Energy Alliance DJI: M600 GE, Mavic 2 Pro GE
Parrot ANAFI 
Autel Evo
October 2019 “No data leakage was found during the limited-scope analysis”
DJI UAS Mission Functionality and Data Management Assurance Assessment US Department of Interior’s Office of Aviation Services DJI M600 GE, Mavic 2 Pro GE July 2019 DJI’s GE solutions provided reasonable mitigations for non-sensitive missions

That doesn’t mean that DJI hasn’t had serious cybersecurity blunders that raise doubts – as large, established companies have done similarly. But when you get into these blunders, they tend to be explainable by understanding that DJI has only been a large enterprise for 6 – 7 years. DJI primarily understands consumer products and is still building knowledge about how to meet enterprise or government-grade needs.

Our previous findings have shown that over a quarter (27%) of all drone buyers were impacted by these security concerns about Chinese-made products. Of those impacted, they were more likely to slow or pause purchases instead of buying alternatives – signifying that DJI and the industry are feeling the impact of security concerns.

What is fact or fiction caused by heightened political concerns resulting from the US-China tech war remains a question. Regardless, DJI has reacted by beefing up its security practices

From our 2020 report, we asked drone buyers what security features are necessary for a product to have before a purchase is made. While the most selected option was that they have no security requirement – suggesting general education on security requirements are low – when you start matching responses to DJI’s enterprise features or specific deployment methods of their products, they address all but one concern.

Broadly this shows that DJI is secure enough for most operators. However, these findings shouldn’t be taken in isolation, and we’ll be digging deeper into where vendors stand in regards to security features in the coming months. In some areas we have seen innovation by new hardware players – notably Skydio and Parrot with their encrypted onboard storage – although many of these new players have not faced as much scrutiny and third-party testing. While this is reasonable considering these firms’ market positions and time in the market, these brands and government agencies should pay as much time to validate that their software is secure as DJI has done, or even more as their focus centers around military customers.

Putting it Together

In totality, while DJI’s market dominance may not be wholly sustainable or healthy, it is clear why it has been so strong in the years prior. DJI offers and continuously releases new products that have a better price, performance and accessibility than nearly everything out there.

At the same time, many competitors have struggled to deliver or catch up. While this fact is changing – particularly due to investment by the US military – it is important for industry insiders and outsiders to acknowledge the value that DJI provides the industry. It is easy to pin the blame for the market’s underperformance against forecasts or general size on DJI, but no competitor has done better.

Where to Find More Insights

The post Why the Industry Still Relies on DJI appeared first on Drone Analyst.


The Start of 2021 Has Revealed Winners and Challenges Behind the Shift to a US Domestic Drone Industry

As we have revealed last year, 2020 saw a resurgence in US drone manufacturers, recouping lost market share by reaching similar level as in 2017. Despite this shift, the industry is still far away from both broad competition or a truly independent US supply chain.

The gap in the market development was made clear by the Office of the Secretary of Defense & Industrial Policy Office’s FY2020 Industrial Capabilities Report to Congress, which explores the relationship between private industries’ capabilities and America’s national security. In their section on Aircraft, the Industrial Capabilities report provides insight into the state of the market, which we cover a few highlights of below.

A Look at UAS Spending By the US Military

Military UAS have traditionally focused on fixed wing aircraft, spread around five groups with a large variation in weight and size. For reference, group 1 is classified as below 20 pounds and are similar in some aspects to what is deployed commercially for surveying applications, whereas group 5 is above 1,320 pounds and includes the much discussed Reaper that is used for tactical strikes. While much attention has been paid to the US-made micro-UAS quadcopter segment, the US military has primarily focused on more traditional fixed wing aircraft. Below is a chart of existing fleets by service. FLIR’s Black Hornet 3 (a heli design) is the only micro-UAS listed.


Existing UAS military fleets by service, with Aerovironment being the only contractor with a UAS aircraft deployed be each service. Note that the yellow highlight is DroneAnalyst’s addition. (Source, page 54)

UAS and tactile missile system developer Aerovironment is notably the only player with an aircraft deployed by each service. This focus has been rewarded by a 23% increase in their UAS revenues from FY2019 to FY2020.

As is evidenced above, the US DoD has adequate industry capabilities when it comes to these more tried and tested form factors, but lacks broad availability of Small UAS. Therefore, the report spends much of its time discussing challenges among the Small UAS class.

Troubles Among Blue sUAS Offerings

As we’ve written about before, the establishment of the Blue sUAS group by the Defense Innovation Unit (DIU), has spurred competition among the thermal-enabled all-in-one quadcopter to provide alternatives to DJI’s Mavic 2 Enterprise Series. With the finalisation of the five Blue sUAS drones – from Skydio, Vantage Robotics, Altavian, Teal Drones and Parrot – in August 2020, we have seen a few of these models hit the broader commercial market.

The original plan was for these drones to be inexpensive, US-made alternatives that can compete in the broader market. From our initial conversations with distributors and leading adopters in the US, Parrot, Teal and Skydio have reached the market, but all have encountered minor hiccups or limited availability along the way.

What is more surprising is that most of the drones may not fully be “Made in the USA”, at least according to the DoD’s report. They assessed the bill of materials of four unnamed US sUAS platforms – which we assume are part of the Blue sUAS Group – and found a significant amount of Chinese components in all of them. Some of these areas, like the fuselage structure, are of little importance but hint at the broader struggles to sourcing affordable, quality components in the United States. The report provided a graph of components of these four drones by country of origin, which we have included below.


Chinese components are still common among US-made drones. Note: we believe that US components are incorrectly colored and instead match the color for France. (Source, page 55)

This raises the broader question of whether or not most of these drones meet new federal rules on component sourcing, or if many of these drones need a waiver to be purchased. Recent rules include Trump’s Executive Order and Section 848 of the FY20 NDAA bill that have both put limits on federal funds purchasing (or using) certain drones, mostly those with Chinese components. While the terminology across these two rules and the above chart are not entirely consistent, having gimbals, cameras or computers/software of Chinese origin would not be acceptable. It is more likely that agencies are currently getting around these limitations through waivers or, in the case of Trump’s EO, outlined steps to mitigate risks related to operating foreign made UAS.

While we won’t go on a wild goose hunt to guess which models are more or less “American”, potential buyers can likely guess based off of each firm’s marketing materials, as some are more specific around being “Section 848 compliant”.

These supply chain issues likely go deeper and we estimate that many of the selected manufacturers haven’t yet been able to steadily deliver units. This is speculation based on the DIU’s recently issued Blue sUAS 2.0 solicitation, which looks for more modular platforms, and specifies a manufacturer needs to be able to make more than 10 units per month.

All this goes to show that building up a domestic production capability that is commercially competitive is difficult, and is going to take longer. As we can already see based on which parts are predominantly made in the US, there is intelligent prioritisation happening.

Importance of the US Military Market

If we turn the clock back just one or two years, many in the industry will find it unbelievable that these military-focused products may have broader commercial appeal. Today, the gap is closing on price and capability between what the military is using and what is available in the market, albeit only in a narrowly defined product segment.

The DoD’s report calls into question the impact they have on the market, having allocated $153 million to its sUAS program in FY2020, out of its $3.2 billion UAS budget. This assessment is based off of a bloated $4.2 billion market estimate of the U.S. small drone market. By our estimation that is severely off-base and overestimates the amount of drones sold into the market. We’ll be releasing an official market size later in April, but we estimate that the US military’s procurement budget as a portion of the U.S drone hardware market is around 10%, not 4%. This better explains why many hardware firms have flocked to the military sUAS segment, as it presents the largest opportunity in the market for them.

Where to Find More Insights

The post Catching Up on Blue sUAS and US Military Purchases of UAS appeared first on Drone Analyst.


DJI Moves to Sell Its Enterprise Drones Online, with Impacts to the Broader Drone Ecosystem

Last Friday, DJI reversed direction and moved to sell much of its enterprise products online. DJI had previously exclusively sold its powerful, expensive and complicated enterprise products solely through distributors like RMUS, DroneNerds, Heliguy and more, with over 100 US-based distribution partners in late 2018, and we estimate roughly 200 globally.

This shift in channel strategy by the industry’s sole dominant hardware provider (at a 69% market share globally) will have serious repercussions across the industry, as dealer margin on DJI’s enterprise products brought an estimated $180 million in 2020 to local distributors around the world.

A Look into the Business of Drones

While consumer drones like DJI’s Mavic Mini have always been available online and at popular retailers like Amazon and Best Buy, most commercial drone sales are done through distribution partners. This is critical as these products tend to be more complex and require additional knowledge to address a client’s specific needs.

This value-add nature of local distributors has been of a great benefit to DJI as it has helped scale out their sales, marketing and support staff without needing to directly hire staff around the globe. To support this symbiotic relationship, with the launch of the Matrice 200 Series DJI began to solely sell its enterprise hardware through distribution. Additionally, DJI has boosted distributor margins for these products over time, increasing on average by 10 points in the past two years. This has led to many distributors around the world to slowly shift their business from the consumer drone market to the commercial one, hiring staff that can assist enterprises and public agencies in scaling out drone operations.

One drastic example of this transformation is Italy’s Hobby Hobby, which – as the name suggests – started as a hobbyist drone retailer. As they saw increased margin in the enterprise segment they incorporated a separate brand called “Elite Consulting” to both sell DJI’s enterprise hardware and offer its own training.

Other distributors such as RMUS have gone above and beyond just education on products, building out a training curriculum that covers drone program management and niche, technical topics like thermography.

Shifting Tides

This change in DJI’s sales strategy comes after a surge of increasingly positive shifts for drone distributors that had recently seen increased margin for DJI products and improved enterprise hardware that incentivise commercial customers to purchase enterprise-grade hardware instead of consumer-grade ones with less margin.

Put together, these previous trends have seen a surge in drone distributor’s share of overall drone sales, as shown below.


Drone dealers and distributors have become the leading purchasing channel in recent years, growing from 16% in 2017 to nearly 30% of the market today (Source)

We’ll track how this trend shifts in the coming years as DJI’s online store starts to compete with its distribution partners.

Overall, we don’t see DJI’s online store being competitive against local distributors in the long run, as DJI has few (or none in most regions) local staff to support the customer after initial purchase. Distributors are also able to proactively bid on projects and package in additional services that would incentivise a purchase.

In a response to our question on support, DJI indicated that its support for online enterprise hardware sales will be in-line with that done on their hobbyist and professional gear.

Impact on the Market

Ultimately it is up to DJI to decide how it sells and supports its products, and if it decides it wants to compete with its distribution partners, that is well within its right. At the same time – due to DJI’s leadership position – these decisions will have widespread impacts on other industry stakeholders that need to be considered.

The largest impact will be seen on the behaviour and profits of distributors. Generally speaking, DJI’s online store will work to squeeze distributors who provide little value-added services and keep DJI products in contention while many start to consider diversifying their drone fleets.

When asked about the rationale behind this decision, DJI first noted that this is primarily a way to meet the increasing demand for its products “in the most flexible manner”, and added:

Our existing DJI Enterprise dealer network has built a strong global reputation as solution partners by offering services, advice and consulting with every drone they sell. Their expertise is invaluable for first-time customers just entering the drone era, as well as for experienced operators who have developed close and responsive relationships with their dealers. DJI is listing Enterprise products online without discounts, at the same price recommended for dealer sales – preserving their ability to negotiate prices directly with customers and respond to bidding opportunities.

DJI statement on why it moved to sell its enterprise hardware online

From our conversations with DJI’s distributors, DJI strongly enforces a unified pricing policy that punishes dealers from discounting their hardware, as suggested in DJI’s statement. Often distributors are forced to cut prices on additional software or services on competitive bids.

Likely this shift is an attempt to capture follow-up purchases from clients currently purchasing from their distributors. This inherently diminishes the benefit of distributors finding net new clients, as they may not share in the profits of this customer’s future purchases. Why spend on marketing activities and business development if a customer will only later choose to buy follow-up drones from DJI’s online store? Instead, it may be smarter to invest in value-added services – which can be discounted – to secure follow-up purchases and improve customer relations. But then who fits the bill for finding new enterprises to deploy drones?

The impact on distributor investment becomes a larger issue for dealers in Europe or elsewhere, where their business tends to be primarily driven by consumer drone sales, with enterprise drone sales as a small, growing segment of their business. DJI holds many levers over their business, easily able to take away access to DJI’s consumer drone products if they explore competitors, and is now likely to impact their profitability by eating into follow-up sales of enterprise drones. With this new threat in mind, how willing will these distributors be to continue investing in the enterprise market? It may be more profitable to act as a passive player instead of investing in new activities that capture new customers.

On the other side of the equation, if DJI were investing these increased profits into further expanding the market, we might see larger benefits to this approach. While DJI’s enterprise marketing department has invested in consistent online educational content on its Insights platform, we have also seen DJI withdraw from investing in staff to support the market growth on the ground. Recent reporting from Reuters found that DJI lost one-third of its US-based staff in 2020, and had a larger cut globally to its sales and marketing operations, including the closing of its entire sales and marketing operation in South Korea.

For full disclosure, the author of this article had previously worked at DJI and led the team behind DJI’s Insights platform.

Good for Profits, Bad for Politics

In the past, DJI has defended itself from attack from regulators seeking a more competitive market by showcasing the size of its ecosystem partners and the opportunities it creates for firms across the world. There is a lot of truth in this story, with many leading software developers and system integrators developing unique solutions on DJI’s affordable, powerful and modifiable software. However that many be changing, as in addition to now competing with its own partners in the channel, DJI last week notified its developer partners that it is pausing key aspects of its iOS SDK, often developer’s preferred platform. This comes after several attempts to compete with its developer partners by deploying similar hardware and software. It begs to question how regulators may see DJI’s net impact on their economy in the future, as DJI increasingly tries to capture the entirety of the drone revenue chain while reducing staff and marketing investments.

This may be particularly critical considering DJI’s addition to the US Commerce Department’s Entity List. With a new administration and Secretary of Commerce in office, this will be a critical time For DJI to lobby for removal from the List. These decisions will have an impact on whether or not its US partners show up to the Hill by their side.

Where to Find More Insights

The post Drone Channel Mayhem – DJI Rewrites the Rules appeared first on Drone Analyst.


Recent Accusations of Fraud Raise the Larger Question about Investing in the Drone Industry

Last week EHang and AgEagle, two companies in the still nascent Advanced Air Mobility (AAM) space, faced fraud accusations by short sellers (EHang | AgEagle). Both stocks have soared over the past year as investors bought into the drone industry hype during a historically bullish market – AgEagle rising from less than $0.5 to nearly $15 and EHang from $10 to $120.

This article won’t look into the specific fraud allegations or offer investment advice, but instead I would like to take this opportunity to elaborate on AgEagle’s situation and business prospects to help close what I see as an information gap between drone industry veterans and the general public.

The drone industry is understandably seen as a new tech space with near-unlimited potential. However, how many perceive where the value of drones actually exists is heavily influenced by the news they read. Media organisations are quick to cover the movements of Amazon’s goal to provide drone deliveries by 2019(!!), geopolitical drama as industry giant DJI is caught in US-China tensions, hype for short-range passenger/delivery drones and, often unconfirmed, sightings of drones near airports.

Put together this may lead the general public to believe the value of drones is in delivering packages or people. That is far from the truth, as the majority of the industry today is focused on professional photography/cinematography or delivering data for businesses and agencies. Drone for imaging applications is a market that delivered over 2 million drones last year, while the delivery and AAM space is slated to receive billions in investments for firms in the test phase with no proven market for their services.

AgEagle is particularly interesting in telling this story of disparate worlds between the drones that investors envision and what is the market today. AgEagle began as a hardware/software play in the agriculture imaging market before more recently pivoting to the much hyped drone delivery space. We’ll take a look at AgEagle’s business, what concerns we have, and lastly what the broader ramifications are for the industry.

A Look at AgEagle’s Business

AgEagle has been trading at 700-800x its annual revenues, with a market cap surpassing $900 million before the fraud allegations.

This means traders believe AgEagle has the potential to grow to make hundreds of millions in just a few years, allowing for further growth of their investment. While 2020 has proven to be a pivotal year for the company as their drone manufacturing business shows signs of existence, we are still talking about a business that was just about $1 million in revenue last year.

A key feature of this uptick in drone assembly and sales revenue is that it is heavily consolidated around one buyer, assumed to be drone delivery mailbox maker Valqari, who makes up 94.4% of their sales. Their contract guarantees AgEagle exclusive rights as their manufacturing partner for two years, and signals that AgEagle will sink or swim with Valqari. This becomes even more apparent when considering that AgEagle recently invested $500K into Valqari, which can be seen as doubling down on a loosing strategy or hastening their rate to scale.

Most other players in this segment have ignored the “last inch” solution that Valqari offers, as early stage deployments have often occurred in suburban or rural areas where drones drop off packages at individual homes and do not need to be stored in a central mailbox.

Our Concerns

Issue 1: Micasense Acquisition

On January 27, 2021, AgEagle announced their acquisition of MicaSense from the Parrot Group for $23 million. Initially this makes sense. According to our 2020 Drone Market Sector Report, MicaSense has been the leading brand in the multispectral drone sensor niche for agriculture, which would easily compliment AgEagle’s focus on agriculture. Even better, MicaSense has healthy, stable revenue sources, beating out AgEagle’s annual revenue in any single quarter over the past two years.

However, despite their name, AgEagle is now focused on package delivery drones. And their CEO’s statement about the acquisition makes this very clear.

With the onboarding of MicaSense’s powerful imaging technologies onto a drone designed for package delivery, we believe it will enable us to produce a turnkey solution that processes in-flight data in real-time. This will allow for drones to effectively assess emergency landing zones, confirm and substantiate successful deliveries and determine proximity warnings, among other important considerations.”

J. Michael Drozd, AgEagle CEO on their acquisition of MicaSense

Now that sounds like a good fit, right? No, this makes no sense at all once you actually consider the technology involved. Multispectral cameras – such as those made by MicaSense – are impressive technology. With drones they are most often used to created detailed vegetation maps that provides insights that traditional photography just can’t. However, MicaSense has little to do with developing obstacle avoidance cameras for drones.

Instead, we have mostly seen combinations of wide-angle visual cameras, ToF sensors, ultrasonic and/or LiDAR sensors for obstacle avoidance. This all comes together with sophisticated software to identify objects and distances in real time. None of which have been MicaSense’s focus, or AgEagle’s.

#2 The Crowded Delivery Space

AgEagle is competing in the hyper-competitive drone delivery space, with Alphabet-backed Wing, Zipline ($230m), Volansi ($75m) and Wingcopter ($22m) to name just a few of the highly capitalised firms in this space. These companies understand it will be a long-haul, with the FAA having just updated the type certification process, and published criteria for 10 companies (who can be seen as leading in the space) last November.

As part of these guidelines, manufacturers will not just need to prove that their design is safe and meets performance-based standards, but have a track record to back it. That is why scale of active deployments is so critical.

While I don’t see the drone delivery space as a winner-take-all market, each of these companies will be hard pressed to find their niche in the market. It is very easy to see who is spending money to develop and improve their product and manufacturing capability (and who isn’t) by taking a look at a lineup of the drones below.


One of these is not like the others. AgEagle’s drone is in the middle and the rest starting from top left and moving clockwise is Wing, Volansi, Zipline and Wingcopter

What this Means for the Drone Industry

Put together, I see this as sign that investors are looking to buy into the drone industry, but don’t have many options. This is changing as VC investment has returned to the drone industry, which will pressure firms to eventually enter the public market and we have high profile SPAC entrances coming for firms in the AAM space.

There is a rich grouping of successful and expanding drone businesses in the drone imaging market. While the hardware segment still has a lot of hurdles to climb before any competitor rivals DJI, the software and services market has a selection of viable and growing organisations. This includes DroneDeploy, DroneBase, KittyHawk, CyberHawk and more. In fact, Measure, a drone software firm with large clients including Skanska, US Air Force and LAPD, has recently announced plans to go public.

While investors may see the imaging drone market to be a stagnant niche, we’ve seen this segment continue to steadily grow. While this segment may never be as publicly visible as drone delivery or transportation, it produces solutions that are already deployed by Fortune 500 firms such as ExxonMobil, Berkshire Hathway’s BNSF, Marathon, AECOM and more. Spending on drone imaging programs has yet to explode, but we do expect the rate of spending to increase significantly moving forward. We explore the trend of how drone programs have formed “from the bottom up” at enterprises and the ramifications in a recent article.

Most importantly, the commercial drone imaging market will work as an entrance into the broader commercial robotics market for industry stakeholders and investors alike. The partnership between Boston Dynamics and DroneDeploy to integrate drone and ground-robot data together was the first sign of the synergy between these spaces. A core application for ground robots will be data acquisition, and as that market segment matures, it will be a growth market for drone software and services businessses.

For investors, this means to stay calm, focus on the fundamentals and understanding the landscape. All types of drones will rise in the future, but it won’t be a straight path. Anything that flies is inherently working in a regulated market, and will often compete with ground technologies. There is a 100% likelihood of drone delivery or transportation being more common than it is, but it isn’t guaranteed to replace or supersede all other technologies in its way. The landscape, and company fundamentals are important.

Where to Find More Insights

The post AgEagle, EHang and the Drone Information Divide appeared first on Drone Analyst.


New DroneAnalyst Research Reveals Commercial Drone Adoption Has Been Spurred by Hobbyists and “Bottom-Up” Growth

Many drone industry veterans have stories of a drone program starting from an employee bringing their personal drone to work. Or a utility company where budget for a small drone fleet is kept just below limits that require management approval.

I have heard more of these “unofficial” stories of drone adoption than I can recount. And through our recent DroneAnalyst 2020 Market Sector Report, we’ve seen that this is more than a personal observation.  “Bottom-up” means of adoption have founded 68% of all business and agency drone programs

These findings correlate to trends in the B2B software market, where bottom-up sales approaches are a go-to for new brands. These brands – including Salesforce who made this approach famous –  develop an easy to master product and rely on individual employees becoming brand ambassadors within an organizations. By comparison, typical “top-down” approaches to B2B sales seek to approach budget holders first.

Bottom-Up Beats Top-Down

We explored the question of bottom-up versus top-down adoption in the drone industry by asking nearly 500 business and agency users across various industries and regions how their drone program was founded.

Respondents were able to select any number of six pre-selected options – three representing a top-down approach and the other three bottom-up – or select “none of the above”. The results from our survey are shown in the image below.

Correcting for multiple choice responses, we saw that 68% of drone programs were founded through less official, “bottom-up” approaches and just 25% from “top-down” ones. Chief among these “bottom-up” approaches were a hobbyist bringing their interest and at times even their personal drone to work. This commercial drone adoption trend is consistent across all industries and regions.

Most notable is the small role innovation departments have played, leading to just 12% of drone programs. Innovation departments only helped found a significant portion drone programs in the Oil & Gas industry.

How Long Will Hobbyists Drive the Industry?

While this trend may be expected in the early days of a new industry, we assume this trend will reverse as solutions mature and the ROI of drone-powered solutions become better established. The solutions today are rudimentary compared to the autonomous, drone-in-the-box data acquisition solutions dreamed up by innovation departments.

This data shows that the drone industry has risen despite this solution immaturity. Hobbyist pioneers have turned today’s drones into piloted data capture tools, helping to fund future innovations through their purchases.

Despite our expectations that this trend will shift long-term, we aren’t seeing this shift yet. Drone programs founded in the past year were more likely to be driven by “bottom-up” approaches, not less.

We are just now seeing a shift towards more autonomous solutions and regulations catching up to enable their use. The first group of Level 4 autonomous drone solutions became available in 2020. We’ll be paying close attention to how this trend shifts as the technology and stakeholders adapt.

How This Impacts the Broader Drone Market

These data highlight that – in these early days – the industry has relied on the hobbyist segment for growth. That should influence the decisions made by brands, and how regulators consider new rules.

The effect of the industry’s hobbyist roots are best shown through the new FAA Remote Identification (RID) rules. After receiving over 53,000 comments – many concerned that network RID could harm the hobby – the FAA shifted to solely requiring broadcast RID instead and allowed for the creation of FRIAs. The FAA’s actions should not just be seen as supporting hobbyists, but securing the growth of the commercial drone industry.

Where to Find More Insights

This is just a sliver of what DroneAnalyst’s 2020 Drone Market Sector Report covers across 67 Figures and 10 Tables. The report is critical for industry stakeholders to understand the players in each market segment, and key trends across drone purchases, service providers, business & agency users and software services.

You can learn more here: https://droneanalyst.com/research/2020-drone-market-report

Here are a few of our previous posts you may also be interested in:

The post Hobbyist Interest Has Unlocked Commercial Drone Adoption appeared first on Drone Analyst.


Breaking Down Trump’s New Executive Order on Protecting The United States From Certain Unmanned Aircraft Systems

Just three days before leaving office President Trump leaves one last impact on the drone industry with a new executive order issued this Monday night. This was one of five executive orders released late on Monday, and focuses on limiting the procurement of foreign-made UAS by the US government.

Put in the administration’s own words, this executive order is meant to “prevent the use of taxpayer dollars to procure UAS that present unacceptable risks and are manufactured by, or contain software or critical electronic components from, foreign adversaries, and to encourage the use of domestically produced UAS.”

The executive order builds on news from the GSA just last week that they would remove all non Blue sUAS drones from many government contracts, and the more widely covered news of China’s DJI being added to the US Entity List.

We expect that Trump’s executive order will capture significant media attention, but won’t have a large impact on the drone industry. This is due to the fact that previous actions are already prioritising Blue sUAS drones and ongoing pressure on federal agencies have moved them away from procuring Chinese or foreign made drones in the past.

Impact on Federal Procurements and Security Review

The executive order asks federal agencies to consider to cease procuring (directly or indirectly), providing grants or renewing contracts that would involve using a drone with critical components made in Iran, China, North Korea or Russia. Over the past few years, we have seen these rules being loosely followed by federal agencies as political pressure and potential legislation (such as the NDAA) threatened to do similar.

One new aspect of this EO is that it requires federal agencies to align with the Director of National Intelligence on the drones being used and whether or not to discontinue their use over security concerns. This process is meant to happen within 180 days from the EO and could result in large shifts among agencies with large fleets, most notably the Department of Interior.

Lastly, the EO does set up a general guideline on what components are considered critical for the design of new aircraft, which will hopefully allow US manufacturers to rely on China and other low-cost manufacturing countries to supply non-critical parts

The term “critical electronic component” means any electronic device that stores, manipulates, or transfers digital data. The term critical electronic component does not include, for example, passive electronics such as resistors, and non-data transmitting motors, batteries, and wiring.

Trump Administration Executive Order on Protecting The United States From Certain Unmanned Aircraft Systems, January 19, 2021

Will This EO Be Reversed?

As with many of the Trump administrations final actions, it is fair to assume that Biden’s administration will review and consider reversing any actions taken, with executive orders being the simplest to reverse. Despite this, my opinion is that the Biden administration is not likely to reverse this executive order as it aligns with their tough on China stance and “Made in All of America” economic policy.

Biden’s “Made in All of America” economic policy directly calls to “strengthen and enforce Buy America [policies]” while calling for an overall increase in federal procurements for infrastructure and R&D. This executive order aligns with these goals, so even if this specific EO is reversed, we would likely see similar guidelines on federal procurements come into effect.

Rebirth of the US Drone Hardware Ecosystem

While we generally haven’t seen large procurements of sUAS drones for federal uses outside of the military, this executive order will support domestic manufacturers in capturing future federal procurements and projects run by government contractors. This comes after several years of federal policies that have attempted to rebirth a US drone hardware ecosystem.

From our 2020 Drone Market Sector Report, we found that the combined US manufacturer’s share of the global drone market caught up to the level it was in 2017 but with a significant shakeup in the brands involved.


While the US drone hardware ecosystem returned to 2017 levels of global market share, we are seeing a complete shift in players in the market

The firms currently with a drone in the DIU’s Blue sUAS group (Skydio, Parrot, ) are most likely to benefit the most from this executive order, but we expect a general slowdown in federal procurements in the short term as these drones are primarily designed for public safety and military applications. We break down the movements in the US drone hardware ecosystem in an accompanying blog post.

Potential Impacts on Drone Regulations

One more nuanced mention in President Trump’s EO is that it requires the FAA to, within 270 days, propose regulations that would allow applicants to petition the FAA to restrict or prohibit operating drones near a fixed site facility.

Limitations near designated sites was originally requested of the FAA in 2016, which included critical infrastructure (energy production, transmission and distribution), oil refineries, chemical facilities and amusement parks as examples of fixed site facilities.

While it is too early to say how this might result in new regulations from the FAA, I would expect new penalties for pilots caught flying near these sites without proper authorization and, less likely, a mandated geofencing system to prevent consumer drones from operating near these sites.

Learn More About the Drone Industry

The post A Look at Trump’s Executive Order appeared first on Drone Analyst.