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Increasing Expectations for the Industrialization of Drone Business

Study Idea

2016.07.27

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What are Drone’s New Values as Information Collection Devices?

  • Drones are expected to have applications in various markets ranging from aerial photography to measurements, inspections, agriculture, logistics, and security. Progress is being made in preparation toward the comprehensive launch of drone businesses along with the creation of laws and regulations by the Japanese government.

Explosive distribution of drones and changes in the market size

The use of drones is starting to gain full momentum in the private sector is in areas such as measuring in civil engineering and inspection work. According to Drone Business Research Report 2016 by Impress Corporation, the market size of drones in Japan was 10.4 billion yen in fiscal 2015, 199 billion yen (+91% YOY) in fiscal 2016, and it is forecasted to reach 113.8 billion yen (roughly 11 times of fiscal 2015) by fiscal 2020. As of fiscal 2015, applications of drones as a service consisted of spraying pesticides and taking aerial photography, but wider use of drones in various areas are expected in the future, including inspection and measurement of bridges, precision agriculture that finely controls the condition of agricultural land and produce, security, as well as logistics. Furthermore, the peripheral service market such as insurance and maintenance is also expected to expand proportionately to the number of operated drones.

Drone’s New value as an information collection device

Currently, drones are becoming increasingly important as a new Internet of Things (IoT) device that has been referred to by some as a “flying smartphone."" By equipping various sensors, drones can now gather information including not only aerial but also position information and infrared thermography information as well. Furthermore, the obtained data could be used by data-utilizing businesses by connecting to a cloud technology and quickly gathering and analyzing the data at mass scale.

Drones have also become significantly easier to use by being equipped with a flight controller for autonomous control. In the past, unmanned helicopters and the like for spraying pesticides could only be used by skilled operators. However, around 2010, DJI started offering a flight controller that combined a gyro-sensor, acceleration sensor, and magnetic sensor capable of position control, and commercial drones using this technology began to be produced in Japan. Although DJI has increased their share of consumer products with the Phantom series being most notable, but now they are also capturing a large share of the commercial drone market, launching professional equipment capable of 4K RAW video shooting and releasing drone models equipped with microwave radars for precision agriculture.

Formalization of Drones Business Paired by Creation of Regulations

Due to the creation of various laws and regulations including the amendment of the Aviation Act, many consider 2016 to be the starting point of widespread drone business in Japan. Drones are being used for photo measurements by the i-Construction project of the Ministry of Land, Infrastructure, Transport and Tourism (initiative for all-around utilization of ICT in construction sites) and its applications are expected to further expand in panel inspections at mega solar power generation facilities. The government will most likely consider issuing ministerial ordinances regarding drones that are more closely related to business applications toward 2017. These include regulations on electrical waves, licensing system for operators, business registration for companies using drones, etc. Unlike manned aircraft, drones will eventually be operated autonomously through communication systems. However, in order to realize autonomous operation, a safe air traffic control system will become necessary. In the U.S., the National Aeronautics Space Administration (NASA) has announced that it will jointly develop with Verizon a traffic control system that uses mobile phone base stations. Due to its history of being rapidly developed for hobby purposes, further verification is still necessary in terms of the reliability of hardware making up the core of the device such as the battery, motor, and wireless equipment. Against the backdrop of a wide range of initiatives carried out toward the industrialization of drones, drone businesses are making steady progress towards comprehensive implementation.

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