Over $1B invested! Will Drones Sink or Fly in '19?

Note: Everything stated in this article is of my own opinion and does not reflect the views or opinions of anyone or any other entity.

2018 has been quite an influential year for the drone industry. Airware was a massive, $118M failure with numerous expensive pivots over its 7 year lifespan. Precision Hawk acquired two more companies, HAZON and InspecTools, to further its position in the energy industry. Kespry announced its first major pivot, now supporting the DJI Mavic 2 on the Kespry platform. DroneDeploy announced a suite of AI, customization, and collaboration tools to shore up it's robust platform capabilities following the announcement of DroneDeploy's Map Engine. The list goes on and on, but it's been quite an active year for the industry.

By the end of 2018, the FAA reported over 112,000 registered Part 107 pilots, up from 74,000 at the beginning of 2018. Over 75% of those drones purchased are being utilized for enterprise or emergency operations. DJI continues to dominate the commercial drone industry by enhancing its product offerings across all price points.

Around this time last year, I published my drone industry predictions for 2018. I predicted that the industry will begin to consolidate. In 2017, GoPro exited the drone industry and Airware acquired Redbird. Within the past year, we've seen Airware exit the ring, while PrecisionHawk scooped up numerous services companies, such as Uplift, to shore up their offerings. Drones have started to become more workflow specific as companies like Propellor and 3DR focus their efforts on delivering the simplest, end to end solution for their customers in construction. Lastly, we've seen regulations begin to relax as the FAA enabled 10 states to take part in their Unmanned Aircraft Systems (UAS) Integration Pilot Program.

Moving into 2019, here are my 6 predictions for where the industry is headed this year:

1. The industry will continue to consolidate as major players realize product market fit

We saw big pivots in 2018 from some major players such as Kespry when they announced Mavic 2 support, Precision Hawks acquisitions, and numerous big feature releases from 3DR, Propellor, and DroneDeploy. We will begin to see the effect of these pivots play out in 2019, leading to more mergers and acquisitions, further consolidating the crowded industry. Investors will use the fall of Airware as a word of caution for anyone looking to invest in the space, and could restrict new innovations in the drone industry. But in the long term, every maturing industry arrives at this point in the consolidation curve. During this stage for the drone industry, the remaining companies will need to emphasize their core capabilities, focus on profitability, and shore up their weaknesses. 2019 will be a tumultuous year, expect a few more failures and maybe even a high profile acquisition.

2. BVLOS waivers will drive autonomous drone adoption

With the FAA enabling 10 states to test Beyond Visual Line of Site Operations (BVLOS), we're beginning to see the FAA continue to support new use cases, while giving companies such as Airobotics, PrecisionHawk, Zipline, and even Uber more leverage to test their respective BVLOS solutions. We will begin to see the effect of BVLOS operations continue to drive business adoption in 2019, with software platforms enabling autonomous BVLOS flights, and improved analytics based on consistent data capture. This would be a big turning point for the industry as we move away from manual piloting, and allow for more consistent and continuous data capture. Expect full automation to still be a few years away, but we will see some advancements in 2019.

3. Automated analysis & reporting tools driven by AI and Machine Learning will be demanded

Just as automated flight planning tools made aerial data capture simple and accessible to the masses, automated analysis and reporting tools will define enterprise drone programs in 2019. Drone companies are increasingly under pressure to deliver real value to "above the line" executives in construction, mining, and insurance. These companies will need to showcase their analytical and reporting capabilities to satisfy the needs of those larger customers in 2019. This includes leveraging AI & Machine Learning technologies to speed up the process between capture to analysis. Simply offering an automated flight solution will not be enough in 2019.

4. Companies have started to bring drone operations in house and manage workflows and data internally

As companies begin to bring drone operations in house, smaller drone service providers (DSP) will begin to lag behind larger DSPs, especially within the United States. While this does not spell the demise for DSPs, this does mean many service providers will fall under the purview of larger professional drone service companies, such as Dronebase, that will help elevate the professionalism and quality of services provided by those in various industries. In 2019, expect many smaller DSPs to disappear as Dronebase, and others like them, grow in market share.

5. Anti-Drone technology will become more prevalent and robust

As we've seen just a few weeks ago in Gatwick, drones are increasingly popping up in populated areas around the world. Certain stadiums and government buildings have already enacted safety measures to identify and disrupt drones within their vicinity. Safety and privacy will be major concerns in 2019 with automated drones, and more governments and private companies will look to adopt anti-drone technology for protection and security. Expect companies like DeDrone, Drone Defence, Skydroner, and many more like them to become more prevalent in 2019.

6. DJI remains the king of the hill for the 6th year in a row

Since DJI released the first Phantom in January 2013, DJI has maintained its position at the head of the drone hardware industry with over 74% market share. With new product lines in enterprise, particularly the Phantom 4 RTK and the Mavic 2 Enterprise, DJI has shown that it's listening to the demands of the burgeoning industry and is willing to build scalable solutions across all price points and verticals. Expect them to continue to grow in 2019, while increased demand for US based hardware companies drives new hardware development, and much needed competition.

Just as 2018 has left a lasting impact on the drone community, 2019 will prove to realize the initial promises of the drone industry in terms of offering fully automated solutions that simplify workflows across industries and use cases.

ABOUT THE AUTHOR:

Jay has been exploring the drone industry for over 5 years, currently as an Enterprise Solutions Consultant at DroneDeploy, working to help nurture the nascent drone industry, and previously as the Product Manager at Kespry. Jay has also co-founded FreeSkies, a Bay-area drone startup that revolutionized consumer drones for use in professional photography and videography. He is a Part 107 certified remote pilot and offers private aerial photography and videography services through Skyfran Aerial Photography and Videography. He has also been rated as one of the most viewed writers in Drones on Quora. Find out more at www.JMulakala.com.