Daily Management Review

Is UAV drone industry falling into decay?


Since the beginning of 2010, when the newly-opened drone manufacturing companies began to take over the market, venture capital startups have seen the future in a wide range of devices. It was assumed that with the help of aircraft it will be possible to carry out a wide range of services, including delivery of parcels, use in agriculture and other areas. Drones are still considered a promising niche, but many large technology companies have chosen not to continue development in this area.

The reason for this decision is loss of millions of investments made in the immature industry, which, contrary to forecasts, has not gained rapid growth rates. Among the disappointed market players is the French company Parrot SA. The company announced shutdown of manufacturing of most drones in early July. Launch Airware Inc. Software raised $ 118 million from investors before closing its doors and sacking 140 employees at the end of 2018. Gopro Inc. pulled out of the drone business and cut hundreds of employees last year, citing an “extremely competitive” market. At the beginning of the year, CyPhy announced that it would change its name to Aria Insights and switch from hardware to the development of analytical data programs for unmanned aerial vehicles. In March, the company closed, having previously made an investment of $ 39 million in venture capital.

Against the backdrop of these events, an active purchase of drone startups is ongoing, and about 67 transactions have already been closed. Customers range from competing drone operators to companies specializing in other industries such as Verizon Communications Inc. According to experts, such transactions may well affect the future range of services provided by companies, from the sale of drones, to the diagnosis and analysis of the data received.

A survey of startup drone executives also notes a decrease in enthusiasm for the development of the industry compared to last year. But even taking into account the market decline, company representatives still see many positive aspects in what is happening, because companies can hone their business models, and the constant development of technology gives drones more opportunities to expand their scope.

source: bloomberg.com