UAV Market to Top $10 Billion over Next Decade

In April 2003, Iraqi Republican Guards were using a sandstorm to close in on US troops encamped on the road to Baghdad. The Iraqis believed the sandstorm would minimize, or negate altogether, the effectiveness of US high-technology equipment. Unbeknownst to the Iraqis, US forces were using Global Hawk UAVs to keep them under close observation. Despite the clouds and sand, the Global Hawk's onboard payload was relaying Iraqi troop positions for US air strikes.

So begins a new report by Forecast1, on the growing importance and recognition of UAVs in theaters of war. On the military side of operations alone (where regulations are probably soon going to restrict all UAV flight), Forecast1 Senior Analyst Larry Dickerson has put together his best estimate for probable global trends in the market.

The market for unmanned air vehicles that perform reconnaissance and surveillance missions is expected to be worth $10.6 billion over the next 10 years, according to Forecast International's The Market for UAV Reconnaissance Systems.

U.S. military actions around the world have helped spark interest in unmanned air vehicles. U.S.-operated unmanned air vehicles (UAVs) have seen action in Afghanistan, the Philippines, Yemen and most recently in Iraq.

"Each military operation has helped to push interest in UAVs up another notch," said Larry Dickerson, Unmanned Systems Analyst for Forecast International. "While interest may not stay at this level, it will remain higher than it was before these operations were launched," he said.

U.S. companies, including Northrop Grumman which makes the Global Hawk, and Predator manufacturer General Atomics, will be the leading providers of unmanned air vehicles, controlling more than 50 percent of this market's total value.

These and other American companies can attribute their dominance to the Pentagon's growing demand for UAVs. Indeed, Forecast International expects the Pentagon to award U.S. companies about $5.4 billion worth of UAV-related contracts in the coming 10 years.

Still, this market is open to new entries. "Some $1.3 billion worth of new requirement contracts are up for grabs, with large and small companies from around the world expected to vie for a piece of this action," said Dickerson.

The UAV market is expected to see a slow but steady rise in its value and the number of systems produced annually. Dickerson does caution that over-enthusiasm on the part of UAV supporters could damage the long-term future of this market. "People are predicting growth trends, sometimes tens of billions of dollars higher than our own, which are simply beyond this market's ability to achieve" said Dickerson.

Although the U.S. fielded UAVs in 1960s, this market remains in its infancy. The truly massive expansion in UAV procurement will probably not occur until 2010 or later.

Don't call the union, yet:

The report concludes, "Unmanned vehicles will never completely replace soldiers in combat. The idea of completely replacing humans with machines was tried with the second generation of industrial robots, which was expected to replace a far more significant amount of factory workers than the first. However, the users eventually realized that there were limitations to the universal use of robots, and the person in the loop could not be (and should not be) replaced too quickly. Unmanned vehicles have their uses, but they should not be introduced to a battlefield's front lines in haste. Despite increasing interest in unmanned air vehicles, the overall market is still in its infancy, with expansion just getting under way."

FMI: www.forecast1.com