Climbing out of the trough of disillusionment and riding up the slope of enlightenment is not easy. The surprising amount of detail
that’s ever present in reality kicks in, and everyone slowly realizes that just because something could be done by drones, doesn’t mean it should. People also realize that just because drones can do certain things better in some specific, localized way doesn’t mean that they are the best solution that ends up being adopted. Climbing up the slope of enlightenment requires just that - enlightenment
on what problems are worth solving at scale and offering sufficient value that the trade-off becomes a no-brainer.
That doesn’t mean there isn’t any value in reading market reports either. The best use of them is to understand the zeitgeist. While they fail at predicting the future, these market reports are quite good at capturing a snapshot of the current market conditions. What’s the market share of software v/s Hardware? What is trending? Etc.
So how do you make the most of these market reports and forecasts? Here’s how I do it -
Focus on the current state. Market research involves doing surveys to understand the current state of the market. This is a valuable snapshot of reality.
Read multiple sources. The full reports are usually not worth it and you can paint a better picture by combining results from several sources and eliminating noise.
Focus on the trends and ask yourself if the trend is in a localized peak of its own hype cycle or if it makes sense in the larger context.
With that in mind, there’s still a lot to gather from the 2021 report. The service market is still the leader, with almost 80% of the market share. What makes up services? From the sample report, we can gather that it includes “drone service providers (DSPs), systems integrators; pilot training providers; retailers & marketplaces ; coalition and organizations; drone shows; drone news sources; drone insurance providers; drone test sites; universities & educational facilities; and, drone business accelerators”
The lion’s share of this would be DSPs offering Drones as a Service (DaaS) who continue to be the primary driver of drone technology adoption in several industries (Inspections, surveying, etc.). Delivery drones are the next largest segment and continue to grow despite the pandemic’s setbacks and have even been used for vaccine deliveries.
Other than the market share, reports often highlight predictions based on recent news and market trends. These are hit-and-miss with some predictions going bust such as the one from 2019 that India will be the fastest growing market due to legalization of drones. In reality, the legalization framework was cumbersome and complex leading to a very slow moving industry. The government followed up with even more cumbersome rules
that was repealed soon after
when the industry complained about the burden of regulations.
The 2021 report predicts India as a candidate for rapid growth. However, this is highly dependent on exact terms of the final drone rules that was supposed to be released earlier this week. With the local manufacturing industry lobbying for restrictive regulations to keep foreign drones away, the final draft will make or break the country’s economic potential of utilizing drone technology. (My work is directly impacted by them, see disclosure
What are some other trends to watch out for? The report says that “the fastest-growing drone market in 2021 and beyond will be Cargo, Courier, Intralogistics
”. This is an interesting one, last week
we saw DHL abandoning its last mile delivery and instead focus on middle-mile cargo using drones. We’ll have to see if this use case turns out to be economical.
In 2020-2021, spraying drone have increased in adoption and DJI just released two new drones
last week into the worldwide market. This is after over 4 years of iteration and real-world usage of their older Agras series drones. A new product release in this direction indicates scope for growth and it is in line with the increase in Agricultural spraying drones in developing markets such as India that I’ve seen at work.
As we move up the slope of enlightenment, it is worthwhile to zoom out and look at where we stand. The industry is growing steadily and to me, the drone age is when we’ve reached the plateau of productivity and the usage of the drones in everyday life is commonplace and unexciting like a smartphone. Until then, we keep flying upwards.