5 Predictions for the Future of the Drone Industry After Part 107

The drone industry was forever changed after the introduction of Part 107 — the Federal Aviation Administration’s new regulations for commercial sUAS operations.

Under these regulations, professional pilots are now required to obtain a remote pilot airman certificate legitimizing their knowledge, amongst a host of other regulations and requirements.

As with any sector, a regulated market is much different than an unregulated one.

Part 107 came out on August 29, about a month ago at the time of this writing. We still have yet to see its full affects on the industry, but I have a few predictions for the coming months and years.

Let’s break them down.

1) Drone Aerial Services Will Become a Much More Competitive Industry

With the commercial drone industry finally regulated, there will be a large influx of new pilots entering the industry.

First off, by mid-March 2016, the FAA had already granted over 4,000 exemptions for commercial drone use (as per their latest aerospace forecast).

The months leading up to Part 107’s release also garnered lots of news coverage. Many current drone pilots who were only flying recreationally probably caught wind and started considering flying commercially, and those who were on the fence and skeptical about the legalities behind it probably saw Part 107 as a way to fly more officially.

At the same time, potential clients (like real estate agents, construction companies, and marketing agencies) probably solidified their loyalty to the pilots in their network who provided good work, showed that they cared about following the pre-Part 107 guidelines, and planned to get their remote airman certificate.

A combination of new pilots entering the industry and increased loyalty from current clients should lead to an increase in competition among commercial pilots.

However, as it takes time to study for the test, schedule a time, and pass it, this influx could be delayed into 2017.

2) Professional Drone Pilots Will Become Better Marketers

By the end of 2017, many drone aerial services markets around the U.S. will start becoming saturated with pilots.

The overall skill level of pilots will begin to commoditize as well, to a point where the difference between a middle- and top-tier pilot won’t be nearly as much as it is now.

To differentiate themselves, professional drone pilots will need to become better marketers. Their demo reels and word of mouth won’t provide as much marketing power as they used to.

Commercial pilots will learn about branding, content marketing, and other tactics to stand out in the crowd. They will also cater to more niche markets in order to stand out and broaden their client base.

3) Commercial Drone Manufacturing Will Reach a Plateau in Innovation

We have seen this with just about every modern technological innovation:

  • Smartphones
  • PCs
  • Voice quality (over phones, etc)
  • The internal combustion engine
  • MP3 players

Innovation is exponential in the early stages of the technology. As innovation starts to slow down, clear winners begin to emerge (DJI, Yuneec) and others fall off.

Innovation then plateaus across the top products sold as their features (autonomous flight, drone camera quality) start looking more and more similar, and the smaller companies thrive on serving niche markets (specialty drones).

This is supported by the FAA’s 2016-2036 Aerospace Forecast, which predicts that commercial drone sales will jump from .6 million units in 2016 to 2.5 million units in 2017, but it will only rise by .2 million over the next 3 years:

faa-suas-sales-forecast

Information technology research firm, Gartner, calls this the Hype Cycle.

559px-gartner_hype_cycle-svg

By Jeremykemp at English Wikipedia, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=10547051

Here are the stages explained:

Technology Trigger: A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.

Peak of Inflated Expectations: Early publicity produces a number of success stories — often accompanied by scores of failures. Some companies take action; many do not.

Trough of Disillusionment: Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.

Slope of Enlightenment: More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.

Plateau of Productivity: Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off.

The drone industry hasn’t followed this trajectory exactly, but it’s pretty darn close.

I believe we’re in the middle of the Slope of Enlightenment phase. By the end of 2018, we will have seen a level plateau in hardware innovation, which will take us to my next prediction:

4) Drone Software Will Become the Defining Factor

As with the difference between Mac’s and PCs, the defining factor amongst the top drone models will become software.

Which drone software…

  • Runs better?
  • Offers more capabilities?
  • Is more user friendly?
  • Integrates seamlessly with other devices?
  • Has a higher price-to-features ratio?

Software will define brand loyalty and much of which models are used for the broadest range of commercial applications.

5) There Will be an Influx of Specialized Niche Drone Models

As the top drone companies get bigger and bigger, additional processes and protocols within each company will make it harder for them to respond to niche consumer demand.

To meet this demand, even more specialized drone models and manufacturers will enter the space. These drones will cater to specific uses, needs, and desires.

Over to You

I predict some hefty changes in the drone industry over the coming months and years, both from the pilot side and the manufacturer side.

What directions do you see the industry taking?

Let me know in the comments below.

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