LAS VEGAS – The global unmanned aircraft market will continue to grow in the coming decade as many nations increase spending on these types of systems, according to analysts.
These projections come despite fewer near-term U.S. military purchases as the Pentagon prepares cuts to planned spending.
Derrick Maple, an analyst with HIS, projects about $81.3 billion being spent globally on unmanned aircraft procurement, services, and research and development over the next 10 years.
“We are very much still at the early stages of the life cycle of this market,” Maple said during an Aug. 7 presentation at the Association for Unmanned Vehicle Systems International’s annual North America Unmanned Systems conference.
“The global market over the next 10 years will grow despite budget constraints, and it is a major developing marketplace,” he said.
The U.S. military is cutting $487 billion from planned spending over the next decade as mandated by the Budget Control Act of 2011.
The Pentagon’s 2012 budget showed about $41.7 billion eyed for unmanned aircraft over a five-year period. That number fell to $28.3 billion in DoD’s 2013 budget proposal, with the cancellation of Air Force and Navy unmanned programs partially accounting for the decline, according to Ron Stearns, an analyst with G2 Solutions.
The current global unmanned aircraft market is about $11 billion, with the U.S. share totaling about $4.5 billion, according to analysts.
“We’re predicting the market to drop back in the U.S. over the next five years and then a resurgence as new programs come on stream,” Maple said.
During the last five years, the U.S. unmanned aircraft market has experienced double-digit growth, and U.S. users account for two-thirds of the market, according to Maple.
“This growth rate is not sustainable, especially under the current drawdown situation in Iraq and Afghanistan,” he said.
Although defense spending in the United States and most of Western Europe will likely decline, unmanned aircraft emerging markets include Russia, China, India and South Korea, Maple said.
“There is a growing indigenous capability out there,” he said.
Tension in the Middle East has served as a catalyst for the unmanned aircraft market, and numerous countries are looking to expand their capabilities, according to Maple.
In South America, Brazil has “emerged as a potential future major player,” and the Brazilian air force is working to establish an independent unmanned aircraft capability, he said.
The next-generation unmanned aircraft programs will favor larger companies, according to Philip Finnegan, an analyst with the Virginia-based Teal Group.
“If you think about the requirement for these systems – some form a stealth, greater autonomy, more power – those all favor larger players like Boeing, Lockheed Martin, Northrop Grumman and General Atomics,” he said. “Smaller companies without production programs are going to face serious pressure in this environment as funding dries up for some of the emergency, urgent requirements that we’ve seen fund those companies in the past.”
The U.S. Air Force’s Long Range Strike Bomber (LRS-B) – which is being designed to fly with or without a pilot -- could end up being a $100 billion program through 2030, Stearns said.
The Pentagon has set a price target of $500 million per copy, and the Air Force wants to buy at least 80 new bomber aircraft.
Defense companies are also looking at diversifying their unmanned aircraft portfolios to enter the commercial market, according to Mike Blades, an analyst with Frost and Sullivan.
“Defense companies, while not totally integrated into this market yet, are looking at it,” he said.