CLEVELAND, June 23, 2016 /PRNewswire/ -- Demand for unmanned aerial vehicles (UAVs), or drones, in the US is projected to rise 10 percent annually to $4.4 billion in 2020, and the number of vehicles sold will more than double to 5.5 million. There are currently two major markets for unmanned aerial systems (UAS): the military market, which accounts for the vast majority of demand in dollar terms, and the consumer market, which accounts for over 99 percent of all units sold. These markets have very different growth prospects. US Department of Defense spending for drones will climb at only a moderate pace through 2020 and beyond, tempered by budgetary constraints and a shift in the product mix to smaller, less expensive vehicles. Most segments of the consumer UAV market, on the other hand, are in the early stages of development, and over the next decade sales are forecast to grow at explosive rates. These and other trends are presented in Drones (UAVs), a new study from The Freedonia Group, a Cleveland-based industry research firm.
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Much smaller commercial and nondefense government markets also exist, together accounting for less than five percent of the 2015 drone sales total in value terms. Use of UAVs in commercial and (to a lesser extent) nonmilitary government markets has to date been severely constricted by Federal Aviation Administration (FAA) regulations. Business and public sector organizations have to obtain authorization from the FAA before operating drones in domestic airspace and are required to comply with a number of restrictions on their use. For example, UAVs are not permitted to fly above 400 feet, have to remain within visual line of sight of operators, and cannot be flown over people not directly involved in their operation. If FAA regulations on commercial drones ease as anticipated, the commercial market will expand faster than any other major market over the next decade in both dollar and unit terms.
Nevertheless, the consumer market will remain a key driver of overall sales growth, fueled by technological advances that are making drones easier to fly, and by the reduced cost and improved capabilities of key subsystems, which are allowing manufacturers to boost product performance without having to raise prices. Military UAVs will remain the largest single market in value terms, accounting for over half of total spending in 2020.
About The Freedonia Group – The Freedonia Group, a division of MarketResearch.com, is a leading international industrial research company publishing more than 100 studies annually. Since 1985 we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Each study includes product and market analyses and forecasts, in-depth discussions of important industry trends, market share information and profiles of the leading industry players. Reports can be purchased at www.freedoniagroup.com and are also available on www.marketresearch.com and www.profound.com.
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SOURCE The Freedonia Group