Key Trends and Opportunities in UAV

Fremont, CA: The amount of technological progress we've seen in the last two decades is mind-boggling. Unmanned aerial vehicles, or drones as they are commonly known, would have seemed like something out of a science fiction novel just 40 years ago. Yet here we are, with fully functional drones that can perform a variety of tasks. Drones have been widely used in military and defense applications, GPS and scouting work, photography, and as a recreational activity, to name a few. Even Amazon has dabbled with the idea of using drones to deliver packages.

This widespread application has given rise to a sizable industry worth nearly $8 billion and is expected to grow to 12 million by the end of 2020. This significant increase presents a significant opportunity for investors who can identify industry trends. Let us start with a quick overview of what unmanned aerial vehicles are, where they're used, and the recent trends in the UAV industry.

Current Trends

Aerial Infrastructure Inspection: This area has grown significantly because of the rise of pipelines and pipeline infrastructure. Previously, if a company wanted to inspect the condition of specific sections of the pipeline, it had to send people on land or hire a manned aircraft, both of which were expensive. Drones have enabled a more cost-effective inspection method. Drones are not only being used to inspect pipelines; they are also being used to inspect agricultural land and railroads. Aerial infrastructure inspection has accounted for 25 percent of the increase in the civilian drone market over the last few years.

Transport and Warehousing Industry: The largest civilian drone sector, but not the fastest-growing, is in the energy sector, where drones are used primarily to maintain and support pipeline infrastructure. That honor is reserved for the transportation and warehousing industries.

Surveying and Mapping: Aerial surveying and mapping are some of the fastest-growing applications for drone technology. What used to require on-foot expeditions or manned aircraft can now be accomplished with unmanned aerial vehicles. This aspect of drone use has grown so popular that it accounts for roughly 37 percent of civilian drone market growth over the last two years.

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