US Unmanned Aerial System Domestic Demand Falls: Suppliers Turn to Foreign Military and Commercial Markets

Frost & Sullivan: As competition intensifies, companies that create efficient, persistent and survivable platforms will remain competitive

Mar 27, 2014, 08:45 ET from Frost & Sullivan

MOUNTAIN VIEW, Calif., March 27, 2014 /PRNewswire/ -- Despite the withdrawal and reduction of troops from Iraq and Afghanistan, unmanned aerial systems (UASs) remain essential for conducting intelligence, surveillance, reconnaissance and strike operations. As Department of Defense (DoD) budgets for UASs decline, however, domestic UAS manufacturers must exploit opportunities in foreign military and the global commercial UAS market to stay afloat.

New research from Frost & Sullivan's Analysis of the US DoD Unmanned Aerial Systems Market finds the market earned revenue of $4.97 billion in 2013 and estimates this to reach $6.53 billion in 2018. A large part of this increase is due to research, development, test and evaluation (RDT&E) funding for long range strike bombers. However, if budget constraints hit RDT&E funding, more reasonable revenue projections for 2018 represent an overall decreasing market at $3.7-4 billion.

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Besides shrinking DoD budgets, the high cost of developing new platforms is compelling several manufacturers to merely modify existing aircraft and subsystems. In addition, an open systems approach intensifies competition. In such an environment, companies that can create modular, size, weight and power (SWaP)-efficient UAS sensors and subsystems will remain competitive.

"Future UASs, tactical and larger, will need defensive features and integration capabilities with manned systems," said Frost & Sullivan Aerospace and Defense Senior Research Analyst Michael Blades. "Platforms that can reliably deliver payloads over greater ranges and for longer periods will also be favored."

Electronic warfare, cargo transport, atmospheric satellites, and identifying intercontinental ballistic missile launches in boost phase are other emerging uses of UASs. Some of these applications will require further testing and validation to ensure UAS platforms can satisfy requirements.

SWaP considerations, efficient engines, hydrogen fuel cells, and longer wings are also being researched or put into practice to strengthen platform endurance. Advances in micro electrical mechanical systems (MEMS), in particular, have significantly impacted SWaP.

"Large defense contractors like Boeing, Northrop Grumman and Lockheed Martin will likely acquire and/or partner with technologically-advanced small businesses to enhance their capabilities in the face of reducing market potential," added Blades. "These acquisitions will help firms widen their profit margins as well as compete in the nascent civil UAS market."

Analysis of the US DoD Unmanned Aerial Systems Market is part of the Defense ( Growth Partnership Service program. Frost & Sullivan's related studies include: Global Border and Maritime Security Market Assessment, US DoD Special Operations Command Budget, and Global Helicopters Market Assessment. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

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Analysis of the US DoD Unmanned Aerial Systems Market 

Jennifer Carson
Corporate Communications – North America
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