Unmanned Vehicles Forecast

Analysis 1 - The Market for UAV

Reconnaissance Systems Through 2013
Table of Contents
Table of Contents......................................................................................................................................................1
Executive Summary.................................................................................................................................................2
Introduction................................................................................................................................................................3
Trends............................................................................................................................................................................3
Competitive Environment......................................................................................................................................4
Market Statistics.......................................................................................................................................................8
Table 1 - The Market for UAV Reconnaissance Systems, Unit Production..........................................................15
Table 2 - The Market for UAV Reconnaissance Systems, Value of Production....................................................20
Figure 1 - The Market for UAV Reconnaissance Systems, Unit Production, Bar Graph...............................28
Figure 2 - The Market for UAV Reconnaissance Systems, Value of Production, Bar Graph.........................28
Table 3 - The Market for UAV Reconnaissance Systems, Unit Production, % Market Share..............................29
Table 4 - The Market for UAV Reconnaissance Systems, Value of Production, % Market Share........................30
Figure 3 - The Market for UAV Reconnaissance Systems,
Unit Production, % Market Share, Pie Chart.................................................................................31
Figure 4 - The Market for UAV Reconnaissance Systems, Value of Production,
% Market Share, Pie Chart.............................................................................................................31
Conclusion.................................................................................................................................................................32
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October 2004

Analysis 1, Page 2

Unmanned Vehicles Forecast

The Market for UAV Reconnaissance Systems

Executive Summary
The U.S.-led invasion of Iraq, as well as military
operations in Afghanistan, have helped to raise the
profile of unmanned air vehicles to heights undreamed
of just a few years ago. Program managers in the
United States have said for the first time they are
actually getting more money than requested. Around
the world, planned funding for UAVs is skyrocketing
and a greater number of production orders are being
awarded than in the history of this market.
The Pentagon plans to spend billions on UAV research
and procurement over the next 10 years. While Europe
cannot hope to match this figure, the continent could
spend over EUR1 billion on procurement and a similar
(or possibly higher) figure on research and
development.
For the immediate future, U.S. companies will be the
leading providers of unmanned air vehicles to the world,
controlling more than 50 percent of this markets total
value and producing far more air vehicles than any of
their competitors. The leading firms will be Northrop
Grumman (maker of the Global Hawk) and General
Atomics (which provides the Predator). These and other
American companies can attribute their dominance to
the Pentagons growing demand for UAVs and to the
availability of financial resources to pursue multiple
programs. The U.S. military is procuring an array of
UAVs ranging from man-portable to high-altitude longendurance systems. Contracts expected to be awarded
to U.S. companies alone could be worth $5.7 billion
over the next 10 years.
Yet this market contains a substantial number of existing
UAV contracts that still need to be awarded. Some $3
billion worth of contracts is up for grabs, and companies
from around the world are vying to get a piece of this
action.
Europe is just as determined as the United States to
expand its UAV fleet, although the continents financial
resources are more limited.
Presently, European
companies control just 5 percent of this markets value,
but this share is expected to grow in the future as new
contracts are issued.
France has plans to create one of Europes largest UAV
fleets. These plans include the procurement of interim
systems to meet immediate needs and others to fulfill
long-term requirements. New tactical and endurance
systems are being introduced, to be followed by a
mini-UAV for use at the battalion level, a vertical takeoff and landing (VTOL) UAV for naval surface
combatants, a high-altitude long-endurance (HALE)

October 2004

system, and possibly a man-portable unmanned air

vehicle.
The United Kingdom is moving ahead with its
Watchkeeper UAV program, which is to be in service
before 2010. Northrop Grumman and Thales are
competing to win this $1.2+ billion contract. A final
winner is to be selected this year (2004). Watchkeeper
will consist of several UAV configurations.
Germany, Spain, the Netherlands, Italy, and Greece are
all expected to place new UAV production orders over
the next 10 years.
EADS, the continents new defense megacorp, will be
among the main beneficiaries of any European effort to
acquire additional UAV systems. The company has
stated that it wants to increase its share of this market
and has acquired smaller UAV companies that will help
it achieve this goal.
Israel Aircraft Industries (IAI) and Elbit Systems Ltd are
also looking to benefit from growing worldwide interest
in UAVs. Israel was at the forefront in deploying UAV
systems and is much more dependent on foreign orders
to keep its production line profitable. Israeli firms are
aggressively marketing their UAVs around the world.
Both IAI and Elbit are forming alliances with large
foreign firms to assist their efforts to win a greater share
of the UAV market.
Interest in UAVs is not confined to America and Europe.
Japan is introducing new systems and plans to develop
new Global Hawk-like high-altitude long-endurance
UAVs.
South Korea, India, Malaysia, Pakistan,
Singapore, Taiwan, and Indonesia, to name a few, are
also looking to acquire UAV systems.
The number of countries involved in UAV research and
acquisition programs will continue to grow throughout
the decade and beyond. More and more nations are
realizing that UAVs can save lives and make a military
force more efficient by performing certain dull, dirty,
and dangerous missions.
Conclusion. The market for unmanned air vehicles is
worth an estimated $11 billion over the next 10 years.
This figure includes all air vehicles, ground control
equipment, and payloads expected to be produced
through 2013.
During this period, the UAV market is expected to see a
slow but steady rise in value and in number of systems
produced annually. Still, this market is in its infancy,
with a truly massive expansion in procurement not
expected until after 2010.

Analysis 1, Page 3

Unmanned Vehicles Forecast

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This Analysis was prepared by:
FORECAST INTERNATIONAL
22 Commerce Road, Newtown, CT 06470-1643 USA
Telephone: (203) 426-0800, Fax: (203) 426-4262
Web site: www.forecast1.com

October 2004