Frost: War Zone Demand Ensures Steady Growth for U.S. Unmanned Systems Market
June 26, 2008 // Published as a news service by IHS
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In support of the global war on terror, the U.S. Department of Defense (DoD) bolstered the strength of its unmanned systems fleet, including unmanned aerial systems (UAS), unmanned ground systems (UGS) and unmanned maritime systems (UMS).
According to Frost & Sullivan, the increasing demand for remotely operated systems from the DoD has created a multi-billion dollar defense industry, where small firms and large defense contractors compete for market share.
Recent analysis from Frost & Sullivan of the U.S. unmanned systems markets found earned revenues exceeding $2.9 billion in 2007, with estimates to reach $3.5 billion in 2016.
"Unmanned systems have proven to be ideal solutions for long endurance intelligence, surveillance and reconnaissance (ISR) missions, target acquisition and in some cases, strike operations," said Frost & Sullivan industry analyst Lindsay Voss.
"This is accelerating the procurement, as well as the research and development [R&D] efforts of the U.S. DoD."
These systems accomplish mundane and dangerous missions, analysts said, thereby giving soldiers the freedom to focus on critical tasks. U.S. military services assigned top priority to unmanned systems programs to ensure continued and consistent funding. After rigorous battle testing, the proven benefits of these remote controlled vehicles encourage other federal agencies and commercial entities to consider adopting this technology.
Despite the DoD's high deployment over the last five years, analysts said growth of unmanned systems in the mid- to long term is expected to be slow. Specifically, growth will likely plateau as technology matures and future growth will be dependent on a long-term plan to develop interoperable and unified systems.
Analysts said changes in the political sphere and a lack of new unmanned system programs represent potential roadblocks to continued progress. These factors will curtail market growth between 2010 and 2016 and will impact companies that have most heavily depended on the DoD.
"Companies that had once tried to break through this market have now focused their efforts on electro-optical and infrared (EO/IR) sensors, miniaturized synthetic aperture radar (SAR), collision avoidance systems, tactical data links and ground control stations," said Voss.
The DoD has not initiated new ventures that could provide opportunities to revitalize the sector in the future. Analysts said budget cuts and decision-making delays will also impact the market's future prospects.
"In the unmanned systems market, the focus tends to be on the platform itself, and several companies have been successful in selling their platforms to the DoD," Voss said. "However, for companies to continue thriving in the market, it will be crucial to explore new methods to optimize system capabilities, including the enhancement of communication systems and payloads."
Going forward, analysts said emphasis will be on interoperability, innovation and the reduction of operational and support costs. Promising areas include sensors, imagers, electro-optical cameras, radar guidance or navigation, communications and ground control stations.
Source: Frost & Sullivan.