Umanned systems market shifts to new customers
By
Nick Wakeman
The Army was once the biggest market in town for unmanned systems, but that's not the case anymore. A new Govini report reveals the biggest and fastest growing market.
The unmanned aerial system market was once dominated by the Army, which was the first of the services to jump on the potential of UAVs to support the warfighter.
The Air Force, with its fighter pilot culture, was slow to adopt the technology, but a new study by the market research firm Govini shows that in recent years, the Air Force has caught up and is now the Defense Department’s largest buyer of unmanned aerial systems.
At its peak in 2012, the Army represented 42 percent of the market, but in fiscal 2015, the Air Force was the biggest buyer with 37 percent of the market. Last year alone, the Air Force made $1 billion in awards, according to Govini.
The Navy also has become an important buyer and actually is growing the fastest with a 17 percent compound annual growth rate since 2012, when it awarded a large ISR-as-a-service contract to Boeing. Overall, it accounts for 14 percent of the market.
While the customer set may be shifting, the vendor side hasn’t. General Atomics remains the largest player with about a third of the overall market. General Atomics makes the Reaper family of drones.
Northrop Grumman is second with about 16 percent, according to Govini.
Together General Atomics and Northrop Grumman control more than 50 percent of the market.
Textron has 10 percent, and Boeing controls 7 percent. The rest of the market share is held by multiple companies.
Besides the drones themselves, there are the systems to maintain and operate them, including networking, intelligence and data analytics. Govini is predicting opportunities around the UAS lifecycle including procurement and modernization.
Govini found that the overall market peaked in 2012, but that there is a resurgence taking place.
In an earlier report, Govini tapped the UAS market as a ripe area for consolidation and that companies such as General Atomics are likely acquisition targets for larger defense companies looking to solidify their UAS platform position.
The UAS Govini report draws three conclusions:
- The market is resurging
- The market has shifted away from the Army as other DOD agencies get more involved
- Opportunities will focus on the entire lifecycle, including procurement, modernization and operations and maintenance.
All three represent business opportunities. The resurgence in particular might be broadest and includes the continuing evolution of UAS technology and DOD’s third offset concept.
The third offset is the latest version of the U.S. strategy to use technology as a way of making up for weaknesses in other areas.
Click here to download the entire report.