Here’s why global sales of drones will pass $12.5bn this year
Link copied to
Spending on drones will reach $US9.3 billion ($12.5 billion) this year — divided equally between business and consumer buyers.
That’s according to researcher IDC which reports the market is growing at about 32 per cent in its latest Robotics and Drones guide.
It’s good news for the handful of ASX-listed stocks with exposure to drone technology (see table below).
Among business buyers, the utilities and construction industries are the biggest buyers acounting for $US925 million and $US808 million respectively.
The fastest-growing industry applications for drones are pesticide and fertiliser dispensing in farms, emergency services and “precision agriculture” (inspection of crops for harvesting or disease detection).
“Organisations continue to explore a range of applications and use cases for drones, moving beyond aerial photography to drone-based deliveries, precision agriculture monitoring, and even time-sensitive medical deliveries,” IDC says.
The fastest growing industries for drone makers are education (73 per cent annual growth) and government (70 per cent).
Safety continues to be a concern — but that’s also an opportunity.
Israeli drone parachute-maker Parazero (ASX:PRZ) joined the ASX last month after raising $5 million to commercialise technology that stops malfunctioning drones from hitting people on the head.
“Vendors and IT suppliers are working to alleviate concerns by building drones with multiple redundancies, improving their sensory and collision avoidance technology, and testing 5G-enabled drones to enable greater connectivity while lowering latency, said IDC research manager Stacey Soohoo.
“The sky’s the limit.”
The United States will be the largest geographic market for drone spending at $US4.3 billion this year, followed by Western Europe and China.
However, China is expected to be the number one market by 2022.
Here’s a table showing the performance of ASX drone stocks so far this year:
The robotics market will be even bigger
Beyond drones, IDC is predicting the broader market for robotics (including drones) will reach $US95.9 billion in 2018.
The overall market is forcast to grow at 20 per cent per year to pass $US200 billion by 2022.
Industrial robots will account for 57 per cent of sales, replacing humans in dangerous jobs.
Welding robots, for example, are expected to acount for 15 per cent of all sales in the manufacturing sector.
Assembly, painting, mixing, mining, shelf-stocking, packaging and even customer service are regarded as major applications, IDC says.
The resources and healthcare industries are the fast-growing robotics sectors.
China will be the biggest geographic market for robotics, accounting for 30 per cent of spending, followed by the rest of Asia, the United States and Japan.