30
1 UAV market potential and development issues May 2020
1
UAV market potential
and development issues
May 2020
Terms and abbreviations
2
3GPP 3rd Generation Partnership Project, issues mobile network specifications
ATC\ATM Air Traffic Control \ Air Traffic Management
BVLOS Beyond visual line of sight
CUAV Counter UAV
D2X Drone to Everything, range of technology to communicate UAV with other objects
DAA Detect and avoid
EASA European Aviation Safety Agency
FAA Federal Aviation Administration
FLARM "flight +alarm" system used on general aviation
GA General aviation
GNSS Global Navigation Satellite System
GUTMA Global UTM Association
ICAO International Civil Aviation Organization
SESAR Single European Sky ATM Research (SESAR)
SORA The Specific Operations Risk Assessment (SORA), includes ground risk class (GRC) and air risk class (ARC)
UAS Unmanned Arial System
UAV Unmanned Arial Vehicle
UTM Unmanned Aircraft System Traffic Management
VLL Very Low Level altitudes
Scope and methodology
Goals:
• Analysis of market potential for civil UAV use. Military use is outside the scope
• Identify key obstacles for UAV make development
Sources
• Interview with corporate users, UAV producers and service providers, C-UAV providers
• EY teams working with UAV companies
• Investment analysis in UAV 2009-2020
• Interview with private drone owners and public survey
• Analysis of international and Russian regulation
• Analysis of media, company websites
Limitations
The report and estimations are based on interview and openly available data. Even though we did reasonable effort to ensure that those numbers are accurate, we did not audit or perform any other procedures to confirm the data. Thus, data presented in the report should not be used for valuations and preparation of financial statements.
3
4
We would like to thank all of the participants that shared their experience,
critiques and views* on the market, including, but not limited to:
*Conclusions presented in the report may not represent views of all the participants
▪ Gazprom neft, Center for Digital Transformations
▪ Gazprom neft, Center for UAV technologies
▪ Gazprom neft procurement
▪ Kaspersky labs
▪ Russian railways, and NIIAS subsidiary
▪ Uralchem
▪ Severstal
▪ EVRAZ
▪ AeroNet, National Technology initiative
▪ Aeronet, association of UAV producers
▪ GLONASS
▪ Steppe agroholding
▪ Aeromax
▪ Skyeer
▪ Aeroxo
▪ Trace Air
▪ FIXAR
▪ Kama Flow
▪ The Untitled ventures
▪ Sistema_VC
▪ UVL Robotics
Analytical and data support: Kama Flow, Drone Industry Insight
5
▌ Market impact from UAV use is at least $1 billion per year (Russia). Drones are already in limited use by companies in
oil and gas, construction, metals and mining. Significant potential but still minimal use in agriculture, healthcare, insurance,
infrastructure and property management. Key obstacles are regulation and lack of infrastructure, including traffic
management, remote ID, charging and unloading stations.
▌ Regulation, developed for piloted aviation, limits use of UAV on one hand, while leaves some gray areas on the other. It
dose not consider UAV specifics like remote control, autonomous flight, very low level flights or flights above people.
▌ More than 60% of UAV potential is in Beyond Visual Line Of Sight Flights (BVLOS). For those flights operator should
get ATM clearance 3-5 days in advance, get permission from local administrations or land owners along intended flight path.
Flights are performed in segregated aerospace, which means no other UAV or plane can operate there during the flight.
▌ To open BVLOS flights and maintain safety, regulatory change should be supported by infrastructure. Existing
aviation systems for flight surveillance have limited capacity to manage increasing number of drones, they may not have
sufficient functionality and security. However, more than 90% of drones operate within stable coverage of mobile networks,
which can provide UAV traffic management (UTM) and identification especially in densely populated areas. Mobile network
operators, along with other non-aviation infrastructure owners may provide charging and unloading stations.
▌ After some slowdown, investments have picked up in 2019, driven by progress in UAV regulation (EU and US),
rising demand for data analytics, increasing interest from automotive industry looking to diversify. Largest investments are in
integrated UAV producers, data analysis and mapping platforms.
▌ UAV impact on local economy may be more significant than in many other regions, given its vast territory and
limited transport infrastructure in some regions. Local companies produce advanced UAVs and software platforms, but
when hit the restrictions shift focus to foreign markets. Use of civil infrastructure may simplify unlocking market potential and
support regulation update. Among top priorities – remote ID, traffic management for BVLOS, flight communication for
command and control link.
Executive summary
6
▌ UAV market and use cases
▌ Beyond Visual Line of Sight (BVLOS) flights
▌ Regulation
▌ Public perception
▌ Counter UAV, C-UAV
▌ Investments
8
Photo and video
Monitoring,
measurement
mapping
surveillance
Buildings
Mines
Long infrastructure: pipes, power lines, roads
Airports
Real estate management
Mapping
Inventory, warehouse management
Delivery, cargo
People mobility (air taxi)
Agri
State of plants, animals, soil, water
Seeding, planting
Spray chemicals, water
Forest management
Geology (search for minerals, metals)
Emergency
Scene examinations
Fire fighting
People search and rescue
Pandemics
Symptoms check
Medical goods delivery
Disinfection (spray, UV)
Telecom signal retranslation
Education
Drone racing / areal light shows
0 1 2 3 4 5
PotentialUse
UAV market and use cases
Only fraction of UAV potential is used
Use potential (estimation from 1 to 5)Range
Inhouse VLOS BVLOS
Video, monitoring,
mapping – most often
used cases.
Use case
Sources: User survey, EY analysis
Largest untapped
potential in agri, real
estate management,
healthcare.
Color: use intensity
9
747
154
216
126
54
32
48
73
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
4
Visual line of Sight (VLOS) flights Beyond Visual Line of Sight (BVLOS)
UAV market and use cases
60% of UAV potential is in BVLOS flights
To open up BVLOS flights, we need to update regulation and build infrastructure. This will unlock markets
and stimulate investments into UAV technologies like batteries and engines
*conservative estimation
Potential effect* from UAV, by range of flight
per year, $US
Sources: EY analysis of international experience of drone use, interview with corporate UAV users
UA
V u
se, by
secto
rs
Solving regulation and infrastructure issues will drive investments into UAV tech
Regulation Infrastructure UAV on board tech
• Regulation is developed for piloted
aviation. On one hand it limits use of
UAV, on the other, leaves some “gray”
areas
(see Regulation section)
• Communication for command and control link
(C2): cell networks, satellites, direct channel
• UAV traffic management (UTM)
• Remote identification
• Stations for charging, unloading, launching
and landing sites for fixed wing UAVs
• Battery efficiency to increase range and lifted
weight
• Sensors for autonomous flights, detect and avoid
(DAA)
• Propeller and engine efficiency to reduce noise and
increase power
• Safety systems for emergency landings
338
40
66
24
54
37
72
31
2000 50 100 150 250 300
Power distribution
Total
8
6
Construction
Metals and mining
Agriculture
Transport
Retail
Production
Health
Other
What is required to unlock market potential:
Average specs of commercial UAV’s Use cases
Range
km*
Flight time,
hours*Cost, $ Notes
100 Up to 3 10 000Long range, but require takeoff
and landing sites Flights along long infrastructure, and/or
remote sites
Combines advantages of the fixed wing (range)
and copter (VTOL***). Higher complexity and cost
Flights in the densely populated areas,
around fixed objects, or within limited space5-10 0.5 1 000High flight precision, limited
range, noise
Arial photography, measurement and monitoring
«Those who tried UAV do not go back to piloted aviation»
10* LiDAR Light Detection and Ranging , **NDVI Normalized Difference Vegetation Index, ***VTOL Vertical Takeoff And Landing
Sources: EY analysis, Kama Flow, interview
Arial photography is the most common use case, it replaces general aviation, opens data that would not
be otherwise available.
Video camera Visual spectrum, resolution up to 80MP Video, mapping, measurements, monitoring
LiDAR*Measure distance to a point with reflected laser light, can
potentially work through leaves and snow. High cost, no colors
High precision 3D mapping of structures,
landscape, trees and plants
Multi \hyper
spectralDetected reflected wide spectrum radiation, outside visible range
Detect leaks, measure state of soil, plants,
animals (NDVI*).
Thermal Detects emitted infrared radiationFinds heat leaks, change in object
temperature, spots body fever
Magnetometer Magnetic field measurement Geological exploration
Dro
ne p
latf
orm
Sen
so
rs
Fixed wing
Hybrid
Copter
11
Despite aerial photography being most common UAV use, many users remain at the pilot \ POC stage
waiting for the issues to be resolved, regulation being the top barrier
Barriers, in the order of impact
Arial photography, measurement and monitoring
Regulation barriers
Regulation
• General restrictions on UAV use of BVLOS airspace.
• Any aerial photography requires clearance from military agencies, which can take few
weeks.
• To use UAV data for state compliance reporting, cameras, sensors, software have to be
certified. Lack of certification guidelines leaves certification in gray zone.
Economics,
organizational
resistance
• Many SME, like farmers, are not ready to invest in UAV with cash flow effect visible only at
the end of harvest season.
• Corporate users do not see UAV monitoring benefits until they try it. Many reluctant to try
due to inherent organizational change resistance.
• Resistance to high precision monitoring from those who benefit from the lack of cost
transparency (i.e. in construction)
Data
• Lack of access to external datasets to train ML image and video recognition.
• Data processing requires power and expensive hardware and can take too long to process
• Current state of 3d modeling is often not sufficient for sophisticated structures or “digital
twins”.
Tech issues
• Battery capacity enough for ~40 min of flight. With large areas (i.e. mining) drones have to
return for battery exchange, which increases time and radius, leads to loss in mapping precision.
• BVLOS direct communication links requires altitude of 1000m (~3000ft) or higher, results in
the loss in image resolution, low efficiency with low cloud covers.
Warehouse management
The most obvious «low hanging fruit»
12 Source: EY analysis and interview, ZipRecruiter, Swiss Federal institute of Technology, MIT, Amazon, DHL, Walmart, UVL
UAV stock management use cases with
Optical character recognition, barcode, QR, RFD
scanning:
• Stocktaking
• Item search and reconciliation
• Item pickup for order collection
• Search for empty slots and space optimization
• Management of warehouse transport
• Internal structure monitoring (i.e. roofs)
• Security
Barriers
• Navigation: loss of GPS signal, need for internal navigation systems like beacons, higher precision of on board sensors
• Might not work when visual inspection of goods is required
• Stok pallets should only be one level in depth
• Navigation around moving objects
• Changing warehouse pallet location
Flights within roofed warehouse do not require waivers, have no weather dependency, low investments in
small drones. E-commerce growth and demand for warehouse workers drives UAV warehouse adoption
75
UAVWorker
15
-80%
“Click to ship”, min
Full annual stocktaking of a large retailer, days
150 5 10 302520
UAV
30
1 -97%
10
80
Worker UAV
-88%
Cost to assemble an order
15 min – average time for stocktaking of ~500 warehouse slots
UAV warehouse impact
VS
*Excluding time to get ATM clearance, when required
5 10 15 2520
85
-37%
3614
-60%
Price UAVTruck
With single parcel delivery UAV is 40% cheaper and 60% faster over truck. Customer also
willing to pay 180% and higher premium for urgency, compared to one day delivery.
Illustrative, copter delivery in a city, distance 5 km, average road traffic speed 27 km/h
Number of parcels
Tim
e, m
inC
ost,
$
Cost and delivery time dynamics,
by number of parcels
To
tal tim
e
Truck UAV
Cost p
er
pa
cka
ge
UAV vs truck specifications,
with comparable costTrucks carry multiple packages and
benefit from economy of scale
UAVs are more efficient in fast delivery of a single parcel
Cargo load, kg 10 4,000
Radius on single charge\ tank, km 5 200
Readiness, time 7 60
Weather limitations Wind 10m/s, t -5c Any weather
Dependency on roads and traffics No Yes
Limitations (in addition to aerial photography):
• General UAV restrictions: regulation, use of airspace
• Difficult to deliver to recipients without private yard, like in apartment buildings
• Negative public perceptions. Especially when package is delivered not to them but to the neighbors
• Limitations on range, cargo load, wind resistance, weather
• Economics - drone has to return to distribution hub after each delivery, increasing path length, cost and traffic congestion
Drone delivery met the highest number of difficulties, from tech limitations to public perception. However, it
has clear niche with high demand of fast parcel delivery
Package delivery
Big hopes, big difficulties
13
• Global. China (Antwork): started from fast food drone delivery, switched to
medical delivery in 2019. UAV take off and, land and charge on dedicated
stations. USA: joint project of UPS and CVC on drug delivery, since 2019.
• Local (Russia). Active discussion on contactless delivery during
quarantine, number of limited pilots. No particular roadmap on the regular
use yet.Urg
en
t d
eliv
ery
Rem
ote
lo
cati
on
s • Global. Ghana, Rwanda (Zipline) vaccine and blood delivery starting from
2016. Dozens of flights per day, routs over 60 km. Has started US operation
in May 2020.
• Local (Russia). Potentially high impact in the remote locations with limited
transport infrastructure, roughly 3% of population. Limitations: high cost of
command and control link (direct, satellite) where mobile network is not
available, weather conditions, use of airspace. Vaccine, blood delivery
«Last feet»
Sources: EY analysis, Antwork, Zipline and UPS websites, public media14
“L
ast
feet”
• Global: USA, Australia, (UPS, Alphabet) first regulatory approvals on
commercial use in 2019. UPS started “last feet” delivery from a truck to a
house.
• Local (Russia): number of trails in 2017, delivery of sim cards, fast food,
cash to ATM. Did not extend over POC stage. Regulatory and use of
airspace limitations, difficult to deliver to multistory apartment buildings, need
for unloading stations, for example on the roofs.
Package delivery
2019: «Second wind»
Three cases where UAV is already used on a regular basis: urgent delivery, delivery into remote locations and
“last feet” delivery
15
▌ UAV market and use cases
▌ Beyond Visual Line of Sight (BVLOS) flights
▌ Regulation
▌ Public perception
▌ Counter UAV, C-UAV
▌ Investments
Beyond Visual Line of Sight (BVLOS) flights
16
• At least 60% of UAV potential is in Beyond Visual Line Of Sight Flights (BVLOS). For those flights operator should get Air Traffic Control (ATC) clearance 3-5 days in advance, get an approval from local administrations or land owners if the flight is planned above their territory. Flights are performed in segregated aerospace, which means no other UAV or plane can operate there during the flight.
• Number of UAVs exceeds number of piloted aircrafts by the dozens of times, ratio is already 30:1. Current ATC systems have limited capacity to manage increasing number of drones, insufficient functionality and cyber security. FAA warn against their direct use for UTM.
• Up to 90% of drones operate within stable coverage of mobile networks, which can provide UAV traffic management (UTM) and identification, in particular in densely populated areas. Mobile network operators, along with other non-aviation infrastructure owners may provide charging and unloading stations.
• International projects on Unmanned Traffic Management systems are based on integration of existing ATC systems, mobile and satellite networks, independent traffic management platforms. One of the key obstacles is cooperation between aviation and telecommunication regulators and players.
Unmanned Traffic Management, UTM
UAV flights require dedicated traffic management
4 45
134
2015 2019
+3,426%
Piloted UAVs
2
2 Up to 10
Up to 110
89%
8100m
150m
* Estimation is based on the limited data of UAV sales, users survey, official data of registered aircrafts
Sources: User survey, EY analysis, International Civil Aviation Organization (ICAO), state regulator (Rosaviation, company’s sites.)
Example of UTM systems (not exhaustive)
National projects Projects by telocs Independent projects
• SESAR U-SPACE
• LAANC, UPP, NASA’s UTM
• UOMS concept
• NEDO project
• ONERA’s Low Level RPAS
• NTT Docomo
• China Telecom
• Swisscom
• Verizon
• Turkcell
• Vodafone
• AirMap
• Kittyhawk,
• AeroScope (DJI)
• Unifly
• Altitude Angel
• Dimetor
Number of UAVs dozens of times higher than number of planes. Capacity of existing air traffic management
systems is limited, regulators warn against their use for drones
Number of UAV* vs piloted vehicles
Russia, Thousands
Number of UAV and PAV by airspace classes
Thousands
Class G, Very Low Level
flights, urban areas. Up to
90% of UAV operations
Class С, G, mostly
general aviation,
outside controlled
airspace. 3-10% of
UAV flights
Class А, commercial
aviation
No civil UAV use
Number of UAVs is already dozens of times higher than piloted vehicles. Regulators advise against ATC systems use for UAV’s
due to limited frequencies, addresses, cyber security concerns. Various UTM projects are based on the use of mobile networks.
3GPP develops NR (5G) and LTE specifications to work with UAV
18`Sources: 3gpp, ICAO, UTM NASA, U-Space, GSMA, Ericsson, NTT DOCOMO
Unmanned Traffic Management, UTM
Mobile networks can speed up opening BVLOS flights
Remote
controlAir Traffic Control (ADS-B*)Telcos, LTE (4G), NR (5G)
Flight and traffic management (UTM) Work with UAV app / sensor data
Receiver for detect and avoid
ADS–B*, FLARM, D2X
*ADS-B is used for public sites like Flightradar24.com
**Included in 3gpp specifications for LTE и NR (5G)
Broadcast:
location,
flight info*
Smartphone
150m\ 400ft
Flig
ht ra
ng
es
UT
M s
erv
ice
s
Command & control, ID, tracking, app data ID, surveillance
Com
mu
nic
atio
n
an
d tra
ckin
g
DAA
Up to 90% of UAV flights are within 400ft (150m) altitude, with stable mobile network coverage. They can
provide drone communication and control links, flight and traffic management, application data transfer
Possible UAV traffic management
Direct link
Within VLOS (Class G)
Mobile networks
Within network coverage, low altitudes and speeds (Class G,C)
ATC systems, satiate, direct link
Controlled airspace, beyond mobile network coverage (Class G,C)
• Registration
• C2 link, channel status
• Remote ID**
• Geofencing
• Flight plan
• ATC Clearance
• Flight tracking**
• Separation
• Route adjustments
• Detect and avoid DAA
• Weather updates
• Land and structures
• Flight above people assessment
based on the smartphone density
on the ground
• App data transfer (i.e. Video)
• Data storage and access
• BI, AI ML
• EDGE computing for UAV
19
▌ UAV market and use cases
▌ Beyond Visual Line of Sight (BVLOS) flights
▌ Regulation
▌ Public perception
▌ Counter UAV, C-UAV
▌ Investments
Regulation
• Key differences of unmanned and piloted flights: remote control, autonomous flights, very low altitudes and speeds, large numbers of UAVs exceeding PAV by many times.
• Those specifics make it difficult to operate drones under aviation rules, while some areas are in the gray zone, like insurance, flight above people or use of Counter UAV.
• Current discussions lean to either of two extremes: “toughen UAV regulation” or “remove all restriction”. Regulation should rather be adopted for drones, in some areas it should be different but coordinated with aviation rules.
20
Regulation of UAV
”Without regulatory requirements it’s difficult to assess business case”
21
Registration Since 2019
UAV classification Only by weight
Airspace classes PAV*
Remote ID PAV*
Use of airspace PAV*
Flight readiness PAV*
Certification NO
Arial photography PAV*
Pilot certification PAV*
Insurance
BVLOS*** NO
Autonomous flights NO
Flights above people NO
Noise pollution NO
Security, C-UAV NO
Military clearance for any aerial photography
For official reporting (compliance) use of UAV
mapping, measurements, sensors and software
should be certified
Resistance to interference, spoofing
Rules on C-UAV use
BVLOS and controlled airspace clearance takes
from three days to several weeks, flights in
segregated airspace.
Requirements to provide safety above people
Up to
150m*
Sources: User survey, analysis of existing regulation, ICAO, EASA, media
* Green: acceptable, Dark Grey: should be adjusted (PAV: regulation for piloted aircrafts), Light gray: regulations should be implemented
** UAV is allowed within VLOS for drones below 30kg during daylight only, starting Jan 2020
*** US regulator (FAA), is issuing urgent permissions for BVLOS flights to Oil and Gas companies to compensate for dispatcher shortages for
pipeline monitoring during quarantine
0 5 Current UAV classification is based on weight only.
New EU regulation suggest 5 classes based on
weight, size, DAA and safety features
UAV Regulation Priority Status*
UAV flight specifics make it difficult to operate drones under aviation rules, while some areas are in the “gray”
area, like insurance, flight above people or use of counter- UAV
22
▌ UAV market and use cases
▌ Beyond Visual Line of Sight (BVLOS) flights
▌ Regulation
▌ Public perception
▌ Counter UAV, C-UAV
▌ Investments
Public perception
Worries of UAV associated risks slow drone adoption
23 Sources: EY user public survey, media, DJI
Noise brings discomfort, lack of knowledge of who operates a drone – fear of illegal activity. Especially with
regular media mentions on drone related incidents including attacks, privacy violations, collisions
90%
79%
65%
49%
42%
19%
21%
0% 20% 40% 60% 80% 100%
OEM data collection
Privacy
Terrorism
Plane collisions
Noise
People injuries
Jobs replacement
Privacy violations is the top concern. A project in Connecticut, US,
of spotting COVID 19 symptoms in the crowd was shut down due
to privacy concerns
Regular reports on UAV accidents, however no official stats like in
aviation or ground transpirations
During drone delivery pilot (Australia) people complained about noise
comparable to F1 racing cars
“What are the top risks of drone use?”Public survey
What can help
1. Remote ID. When drone operator and flight purpose is known fear goes away.
2. Flight Above People regulation
3. Insurance requirements, that will filter out high risks drones and pilots
4. Safety standards on drone systems and emergency landings
Dec 2019: DJI introduced remote ID using
built in Wi-Fi, without any additional
equipment.
Drone identification can be made with any
smartphone within drone Wi-Fi range
Raise of complains about unknown drones have grown up by 40%*,
police is usually helpless
24image: Kaspersky labs
▌ UAV market and use cases
▌ Beyond Visual Line of Sight (BVLOS) flights
▌ Regulation
▌ Public perception
▌ Counter UAV, C-UAV
▌ Investments
«How do you see market potential?» (1-10)
Counter UAV (C-UAV)
Demand for Counter UAV grows faster than demand for UAVs
25 Sources: EY, Kaspersky, DRONEII, Center for the Study of the Drone at Bard College
UAV Incidents, few examples
• Airspace closures:
2020, May, Latvia, a drone with enough fuel for 90 hours of flight lost
control link soon after launch, causing airspace shutdown for 3 days
2020, January, Madrid airport shut downs
2018, Gatwick, Heathrow airports shutdowns
• Terror attacks on politicians, use in domestic conflicts
• Privacy: regular reports of unknown drones following people, spying
into windows and courtyards, drone swarms
• Information theft: drones can intercept or spoof information from
private Wi-Fi networks, read visual signals from LED or monitors
• Speculations of unauthorized data collection by UAV manufactures
Existing air defense systems are not efficient against UAVs or very
expensive. In 2017 $3,000k Patriot missile intercepted a $0.2k drone
Raising C-UAV demand from airports, state agencies controlling restricted
airspace, owners of land and houses, public events organizers, like concerts
or sport events
7,1
6,5UAV producers
5,7
C-UAV producers
UAV service providers
C-UAV companies are most optimistic about market potential
Identification InterdictionDetection UAV
3%
6%
48%
5%
1%
• Remote ID can be implemented
with UAV ID broadcast (i.e. with Wi-
Fi), mobile network communication,
or UTM systems
• Even though there are private
implementations for UAV’s used in
closed perimeters, there is no
single standards nor requirements
for remote ID
Jamming
Spoofing
Net over drone
Laser
Drone interceptor
1 2 3
% of CUAV systems
Three stages of counter UAV:
Radar*
RF
scanner
Vis
ual*
*
IR
Laser
Audio
**Daylight + + + + +
Darkness + + + + +
Noise + + + + + +/-
Birds + + +/- +/-
Autonomous + +/- + + +
Multiple objects + +/- + + + +/-
Adverse weather +
Long distance + + +/- +/-
Dete
ction c
onditio
ns
+
+/-
efficient
with limitations
Detection methods and their efficiency I. Drone interdiction tech
Counter UAV (C-UAV)
Remote ID could reduce the need for drone interdiction
* Mobile networks are tested for primary (radar) UAV
surveillance
**Use AI, ML to detect and trace UAVs
II. Pilot identification
• By direction of radio signal
• By flight path, usually around
operator’s location
• By ID, when available
Sources: Kaspersky labs, EY, GUTMA, Center for the Study of the Drone at Bard College
Counter UAC consist of 1) detection 2) identification 3) interdiction. Without wide adoption of remote ID
C-UAV systems interdict any, even legitimate drones.
C- UAV risks
• Jammers: risk interfering with critical aviation equipment, nearby medical equipment.
• Collisions with falling drones, especially when intercepted \ above people. Spoofing drone for emergency landing can lead to unsafe flight pattern.
• No international standard on work of C-UAV systems. Some users claim that C-UAV systems not always meet stated specifications.
• Privacy and spying. Powerful UAV detection systems can be used to for drone unrelated tasks like spying, interception or jamming of communications.
27
Counter UAV (C-UAV)
C-UAV is regulatory tool and subject for regulation
Sources: EY, Kaspersky, Center for the Study of the Drone at Bard College, DRONEII
С-UAV used to enforce regulation, but, if widely used, can become a source of risks. Remote ID and C-UAV
standardization may reduce risks
28Image by Joby aviation
▌ UAV market and use cases
▌ Beyond Visual Line of Sight (BVLOS) flights
▌ Regulation
▌ Public perception
▌ Counter UAV, C-UAV
▌ Investments
Investments
After some slowdown, investments have picked up in 2019
29
118
104
249
117
2,475
115
United States
China
Japan
53
Closed
Israel
France
Switzerland
129
Active
Russia
Canada
Hong Kong
United Kingdom
448
85
76
3
1
23
182
19
20
16
17
25
12
4
18
Total investments exceeded $4 billion, US and China contribute 75% of the total volume
Number of projects
Sources: Kama flow, CrunchBase, EY, DroneII, company sites
0
500
1,000
3 92 16
836
86 107 144
932
131151
378
21
50
150
0
100
113
Project ages by total investment volume
Age/ $ m
Close \ downscaled
• Jump in UAV investments in mid-2010 slowed after difficulties
with commercial use. The key issues across the globe are
regulatory uncertainty that lags behind number of drones and
their potential use
• Investments have picked up in 2019, driven by progress in
UAV regulation (EU and US)
Countries by total investments in UAV related projects,
$ m
30
500
0
1.000
1.500
419676
1.364
789195 205 133 186
5614
3
5026
15 13 11
0
20
40
60
UAV, software Sensors Human
mobility
ML, AI Mapping, 3D
modeling
ServicesUAV based
Traffic
managementC-UAV
Production, integrated companies Software
• UAV hardware manufactures develop own
software, sensors, radars, which push 3d party
producers off the market: GoPro left drone
market after DJI released Phantom 2 with built
in camera
• In addition to equipment sales, producers often
provide UAV based services
• Commercial use drives
demand for mapping and
analytical software
• Some software packages
have sector specialization, like
agri, construction and
insurance
• BVLOS demand drives UTM investments
Investments by value chain, $m
Number of projects.
Investments
Investors focus on integrated companies and dedicated software platforms
Initial demand for “flying cameras” moved to analytical platforms, UTM C-UAV. Largest investments into integrated companies and urban mobility
Sources: EY analysis of 188 public investments, Drone Industry Insight, Kama flow, CrunchBase, company sites
Yuri Gedgafov
Head of EY TMT Center
Anton Ustimenko
CIS TMT Leader
Sean Seymour
Global Mobile Technologies Leader
