Los Angeles, CA (PRWEB) June 29, 2012
The Unmanned Aerial Vehicle (UAV) Manufacturing industry is growing. The benefits of unmanned drones combined with various military and civilian needs have created favorable conditions for drone manufacturers during the past five years. While multinational conglomerates like Northrop Grumman are expected to dominate the industry, specialized firms like General Atomics Aviation Systems also garner a sizeable share of overall revenue. “With the US government as the primary client, firms seek to develop solutions that reduce risk to human labor, increase operational efficiency and extend the reach of various conflict-resolution groups, from the US Navy to local firefighters,” says IBISWorld industry analyst Josh McBee.
Favorable conditions stemming from recent conflicts in the Middle East, as well as the ongoing need for homeland security, are expected to increase industry revenue at an annualized rate of 11.5% during the five years to 2012. At the same time, firms in the industry have benefited from reduced operating costs in the form of falling prices for semiconductors and electronic components. Lower input prices combined with high demand are expected to increase industry profit and lure more companies into the drone manufacturing business. In 2012 alone, revenue is expected to increase 13.2% to total an estimated $4.8 billion, as the US government contracts firms to create drones it then uses for either domestic purposes or sells to foreign nations. There's no shortage of opportunities for drone manufacturers during the coming five years. According to McBee, technological advancements in payload capacities, fuel efficiencies and onboard systems are constantly evolving to expand the usefulness of UAVs. Though federal funding for defense and homeland security are both projected to fall off during the coming five years, the ongoing threat of terrorism and disasters (man-made and natural) will continue to spur investment into drone research and development. Through 2017, revenue is forecast.
The Unmanned Aerial Vehicle (UAV) Manufacturing industry is characterized by a medium to high level of concentration, with the top four companies accounting for about 59.2% of industry revenue. The overall industry comprises about 36 companies with 38 manufacturing facilities. The top two companies, Northrop Grumman and General Atomics Aeronautical Systems, generate a combined revenue share of 40.5% or nearly $2.0 billion through their UAV manufacturing operations. High barriers to entry play a large role in determining concentration level, as the vast majority of industry revenue is granted through US military contracts. In addition, the costs associated with developing and producing sophisticated UAV systems are very high. Contracts are usually awarded to existing players in similar fields or those with a previous successful relationship with the US Department of Defense (DOD). For more information, visit IBISWorld’s Unmanned Aerial Vehicle (UAV) Manufacturing report in the US industry page.
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IBISWorld industry Report Key Topics
Industry firms manufacture and design unmanned aerial vehicles (UAVs) and related control systems for civilian and military applications. UAVs can be either autonomous or remote controlled, and are used in situations where the use of a human pilot is undesirable or dangerous.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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