Finalising Regulation: ‘Commercial application of drones to extend to energy, mining’

GROWTH SOURCE
Commercial applications are growing due to falling prices and technological innovations such as collision avoidance, autonomous flight mode, home return and first-person-view (FPV) which have made drone systems relatively easy to use across a wide variety of applications

THE SOLUTIONS
In terms of players, DJI dominates the hardware segment, capturing two-thirds of the total market. As the hardware market is highly concentrated, many players have switched their focus to providing software solutions and services to help the companies in deriving maximum benefits from their drone operations

THE APPLICATION
Commercial drones have a wide variety of applications. For example, in agriculture, they can monitor variability in crops, determining optimal levels of irrigation, pesticide and fertiliser use. The results are available much faster compared to traditional methods and the saving in time and input costs leads to improved yields, revenue and margins for farmers. Drones are also being used with equal success in many other industry sectors

Delivery: Drone delivery is often positioned as a promising area of drone deployment. Several companies are testing their potential ranging from package delivery (Amazon Prime Air) to providing emergency support services (e.g. Flirtey, Zipline) where drones can be used to deliver supplies in remote or otherwise difficult to reach areas. This is critical in situations where conventional overland or air supplies are difficult due to availability, resources or difficult terrain. Below is a quick overview of the impact of drones in various segments.

REGULATORY HURDLES
Even though adoption across certain industry segments has been increasing, regulatory issues remain a stumbling block to broader deployment of drones in the commercial sector. Regulations vary by country, though most currently require drone operators to have “line of sight” contact with the drone always. This limits the distances that drones can fly from the user or base. Mandatory registration of drones beyond a certain weight is also a requirement in many countries.

THE WAY FORWARD
Going forward, commercial drone usage would increase in emerging sectors like insurance, telecom and delivery with a rise in drones as a service model.

MARKET SIZE
The commercial drone hardware market is estimated to be around $ 0.7 bn by 2020 growing at a CAGR of 33% per year with Average Selling Price almost double when compared to the consumer drone segment