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Keep the drone higher!

Global market of civilian drone technology is booming. In global market for civilian drones is booming. In Russia this trend can be restrained by officials.

The commercial drone market promises to change the life of mankind by doing various jobs, starting from security guards and delivery men and ending with agronomists. The market volume keeps growing exponentially every year along with development of technologies. But it seems like Russian authorities perceive new generation aerial vehicles, even toys, as being too much of a danger.In Russia this summer came into force a legislative norm on the mandatory registration of unmanned aerial vehicles (UAVs, quadrocopters, drones). Now, each owner of such a device weighing more than 250 grams must put his "bird" on the account. However, when it came to details, it turned out that neither the registration procedure nor the responsibility for evading it has not yet been determined. But the members of the copter community fear that this is only the first step and in the future the authorities may take a few more "draconian" innovations, simply by suppressing the rapidly developing industry in Russia.

If this is not going to happen, then according to the analysts, the Russian UAS market has a high potential for growth and may become the third one in the world by 2021 However, nobody now can predict how drones will look like by this time. At the beginning of 2010s, the segment of personal drones became very popular, having implemented to some extent mankind’s old dream of learning to fly, but mostly for
pleasure and entertainment at this point. In the nearest future designers and manufacturers are expected to improve drone batteries and systems for their autonomous flight, and then their application in the industrial and service sectors will start booming.

The eye of heaven

The idea of a remotely controlled aerial vehicle is not itself a new one. The first projects appeared as long ago as in the XIX century, and during World War I in the US a project on the development of the Hewitt-Sperry automatic airplane was lunched.

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During World War II the US, that had become a leader in the development of unmanned aerial vehicles, actively used controllable “flying bombs”, though not very successfully, in the Pacific Theatre of Operations. The bombs were dropped from bomber aircraft before they entered into the zone protected by the air defense forces of the enemy.

Today, surveillance drones, unmanned aerial vehicles and cruise missiles are adopted by armies of many countries (Russia for the first time imported reconnaissance drones from Israel at the end of 2000s). According to PioneerSummit, in 2016 the global supply volume of military
UAVs was $6.4 bn, out of which the US share accounted for almost one half ($2.9 bn or more than 50 systems).

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But it was not until the 2010s, when civilian drones started to be widely used. Their use was driven by a set of improvements which made already known technical solutions less expensive, more affordable and popular.

“Previously, similar devices — from military airplanes to toy helicopters — had a complicated balance system in the air. A quadcopter, unlike them, is propelled by four rotors which make it move by changing the speed of each rotor. This is the cheapest form factor”, says Alexander Malkov, Director of Quadrocopter.club Moscow Office, CopterTime Pilot School Instructor.

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“In about 2007, cheap gyroscopes, gyrometers and other electronic flight controls started to appear. All the rest was just the matter of business and marketing. In 2013, the market was blown up by DJI Phantom released by Chinese DJI. The next leap was made in 2015, when DJI Phantom 3 was released”, adds Oleg Ponfilenok, President of Association of Small Drones, General Director of Copter Express. Now,
besides DJI, the leading manufacturers of copters are Parrot SA (France), Yuneec (China) and 3D Robotics (USA).

“Their products are mainly used for aerial photography. Motion picture companies and TV companies use copters in the production of their shows and video clips; “a view from the top” has become a must do technique. Even more often copters are purchased by ordinary citizens for traveling purpose”, says Malkov.

The market of photo copters demonstrates a steady growth, although at a slower pace: in 2013 its global volume was $0.3 bn, in 2016 – $2.3 bn and in 2020 it is expected to hit $3.3 bn (Source: Goldman Sachs).

Pizza by air

Drone producers strongly expect commercial use of drones to become more popular. Drones are already used in various industries: in agriculture they analyze the condition of plants and moisture content in soil with multispectral cameras; in the energy industry they control the integrity of power infrastructure with thermal imaging sensors; in the insurance business they first arrive at the scene of insured events.
Though, there are some exotic UAV applications: zookeepers in Chinese Heilongjiang Province use drones for exercising of
local tigers; archaeologists from the US Vanderbilt Universityuse drones to survey remotely located Peruvian sites.

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Delivery drones look most promising. Amazon announced about its intention to start using drones to deliver packages to its customers already in 2013 In 2014, in Syktyvkar a businessman Oleg Ponfilenok jointly with Dodo Pizza arranged a pizza delivery by air for the first time in Russia. In 2016, Domino’s Pizza in New Zealand started regular deliveries of “flying” packages to its customers.

Quantitative evaluations of the commercial drone market vary a lot and hardly can be precise. Thus, in 2010 America’s Federal Aviation Authority (FAA) estimated that there would be perhaps 15,000 civilian drones in the country by 2020 But already in the last year 2.8 million drones were sold in the US to the total amount of $953 million. Globally, for the same period 9.4 million drones were purchased to $3 bn (Source: The NY Times).

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This year civilian drones are expected to bring their producers $6 bn and $11.2 bn by 2020, analysts from Gartner predicted. Other marketing researches may contain different figures: 

  • MarketsAndMarkets ($13.2 bn in 2016, $28.3 bn in2022)
  • Statistics MRC ($5.9 bn in 2015, $22.2 bn in 2022)
  • Business Insider ($8 bn in 2016, $12 bn in 2021)

But the trend is similar: the annual market growth by 15-20% is guaranteed. As for the volume of services provided by drones, it is expected to grow even more significantly from  $170 million in 2015 to $8.7 billion by 2025 (according to Tractica). PricewaterhouseCoopers evaluates the maximum potential of the drone technology application in the industry at $127 billion/year. Investments in drones also grow: drone
producers raised $10 million in 2012 and already hit $450 million in 2015 (Source: CB Insights and GSV Asset Management).

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Anyway, the civilian drone market will remain behind the defense market under any scenario over the long term: Goldman Sachs estimates that in 2016-2020 sales of military drones will take 70%, personal drones 17% and commercial drones 13% of all market sales. 

Wide autonomy

Experts believe that this situation can be changed drastically only with the next technological leap. So far, this growth takes place for account of manually piloted drones. But air delivery services need fully autonomous devices that would travel in accordance with a specified flight program, get charged on special sites and
have more options at the final stage of delivery when contacting with customers. In other words, it is already a high time to add artificial intelligence. There will be not small hobby drones, but quite large devices capable of delivering cargoes. They are expected to be released on the market in about three years”, says Ponfilenok.
Battery capacity is another big challenge for the industry. As Malkov explains, now drones can accelerate up to 150 km/h and fly over a couple dozen kilometers, which is quite enough for delivery purpose. But everything is restrained by lithium polymer batteries, which are the same as those for smartphones. They can power just a 30-40 minutes flight, whereby limiting drone application in all sectors. We need a
revolution in the battery world. In Chine there are hydrogen powered drones, which batteries actually work as a small hydrogen reactor. But at this point such device is expensive (about $5 thousand) and heavy, taking all thrust on itself, i.e. such drone can stay airborne for several hours but cannot carry any payload. Malkov believes that something will be invented in 2-3 years, because smartphone producers for
which short battery life is a headache also invest big money in the problem.
Malkov predicts that the next step after invention of long life batteries will become the adaptation of drones to transportation of people. In Moscow Technopolis they
already try to fly 5-10 m by a quadcopter. It is easy and even safer, as compared to piloting a helicopter, passengers need no special pilot skills. But a taxi that so far stays airborne just for 5-7 minutes is not interesting to anybody. Though, more and more prototypes of taxi drones appear: one of them was demonstrated at the World overnment Summit in Dubai in February of this year. Mattar Al Tayer, chairman of the city’s Road and Transport Authority, promised to have first passengers serviced by autonomous taxi drones already in that summer, but since that time nothing has been heard about it so far.

That is not a toy

But in addition to technical restraints the future of unmanned vehicles also faces other challenges. As Eugene Korchago, Chairman of the Starinskiy, Korchago and Partners Bar Association, says in his interview to Profile, a drone is a source of increased danger, even when used for personal needs. The number of such devices keeps growing and citizens, especially young people, not always operate them with all due care and diligence. For example, drones may be lunched in public places, but their rotating propellers are not isolated and may injure people passing by, while taking off or landing down. When launched in the countryside, they may damage environment (tree crowns, animals); when launched in the city, they may damage buildings, overhead lines. In addition, drones may be used in the restricted air space for
aircraft with special access conditions. So, tomorrow we might have an aircraft accident, the day after tomorrow a drone might fly above intelligence service buildings and then transfer information to terrorists. So far, there is no system that would protect us from all these things, that is why it does not make sense to talk about mass application of such devices. Drones are quite comfortable tools for various  malefactors”. For example, paparazzi use drones abroad to spy on celebrities during their vacation. In Russia, a famous drone
user is Aleksey Navalny, whose Anticorruption Foundation takes pictures of countryside houses allegedly owned by the Russian government officials. As Navalny himself explained, it is impossible to prohibit it, because guards of such houses can neither reach nor even detect a drone hovering in the air. In spring of this year terroristic threat from drones started to be discussed by the general public: because of it in June the Championship League final between Real Madrid and Juventus was played under a closed roof stadium. However, drone fans do not share such concerns. Alexander Malkov believes that drones are as dangerous as bicycles. A drone itself cannot attack anybody, everything depends on adequacy of its pilot. And equipment becomes even smarter: modern drones have visual sensors which almost entirely exclude any collision with large objects. In the restricted flight zones around airports a drone will not even take off, because the program will not let its motors turn on. Ponfilenok acknowledges that a threat from drones is an insufficiently studied topic that becomes a source of speculations and irrational fears. People express them, not bothering to bring any arguments. No terroristic acts with the use of drones are known so far. But these fears create a phycological restraint for the industry.

Registration is tricky

In this situation authorities are trying to take drones under control. In the US drones are prohibited to fly directly over people, at a distance higher than 400 feet (about 120 m) and beyond the pilot’s line of sight, and the pilot should have a special certificate. In Russia, according to the Federal Regulations on Air Space Exploitation, dated March 11, 2010, UAVs weighing more than 30 kg must be registered. According to the experts, a share of drones subject to this provision is negligible because even large agricultural drones weigh about 13 kg. But a month ago amendments to the Russian Federation’s Air Code, adopted in December 2015, came into force, meaning that now it is necessary to register drones weighing more than 250 grams. The procedure was to be administrated by the ZaschitaInfoTrans state unitary enterprise, which was subordinate to the Ministry of Transport, but according to mass media, law-abiding drone owners, who applied to the company on the very first day after the new provisions became effective (July 5), were brushed off: there were informed that the registration procedure was not going to start until the government would issue a supplemental decree. But at that point there was only a draft. According to Korchago’s comments, amendments to the Russian Federation’s Air Code are only blanket legal provisions, meaning that the Regulations are to be clarified in the decree of the government. For the time being, drones still can be used freely. And until now it is not clear whether
there will be any serious responsibility for a failure to comply with the registration procedure. Anyway, nobody is going to catch teenagers, who wanted drones to fly over a pond or in the field, not bothering anybody. As for people with criminal intentions, the registration procedure, as it is, will not become an obstacle for them. This is just the first filter designed for non-professionals. But over time some
additional measures will certainly appear. Drone fans already feel unhappy, because even remotely controllable toy helicopters weigh more than 250 grams, meaning that they, apparently, should also be registered. In 2015, when amendments were discussed, Eugene Moskvichov, Duma Transport Committee Head, said that the minimum weight could be increased, but now this cannot be done according to Korchago. Drone society members are even more concerned about further restrictions: on professional forums they imagine various scenarios related to the air traffic regulations, transport tax on drones and compulsory insurance. And these are not only hypothetical discussions: after the aforementioned pizza delivery in 2014 Oleg Ponfilenok was penalized for RUB 50 thousand by the decision of the Syktyvkar District Court for using air space without a license, though he managed to appeal against that decision in the court of high jurisdiction.


“We expect the registration procedure to start working to its full extent already the next year. What is next? I hope that law makers will not invent driver’s license for pilots. Or fully autonomous drones will be released before they do that”, says Ponfilenok. “Laws can be written both ways: comfortable for all people and comfortable only for officials”, adds Malkov. “They can make drones bear identification plates, enabling to identify their owners, restrict their flight range (120 m is quite enough for taking photos), build a clear and transparent procedure for obtaining all papers. But they also can say that flying over cities is prohibited in principle, and then, no doubt, the market will drop. But the scientific potential of the country will drop as well.” 

Flying Russians

Now almost all civilian drones are imported to Russia from abroad, though at this time there are some companies mainly dealing with drone assembly, setting and maintenance (ZALA Aero Group, Unmanned Aerial Systems, Istrinsky Experimental Mechanical Plant, Aerocon, Special
Technology Center). Quantitative estimates of the national market differ. For example, according to J’son & Partners Consulting, the share of Russia in the world sales does not exceed 2% ($147 million in 2016) and it has a small potential for growth ($224 million by 2020). But Goldman Sachs in its  research estimates the forecasted volume of the Russian market in 2017-2021 at $3.9 billion or almost 7% of the world
market (only the US and China take larger shares). “It seems real that we will take the third place in the world”, comments Malkov. “Revenues of Russian companies keep growing, people need drones more and more, almost like mobile phones. Everything is going to be all right, if
authorities do not adopt any draconian laws. What about cold climate? It is not an obstacle, because drone batteries can be warmed up.”
Malkov admits that it is impossible to tell how many people are fond of drones, because local societies are quite scattered. People mainly communicate via the Internet. As or “live” events, then the club regularly holds briefings and master classes. Several tens of people in Moscow visit eachof them. Drone races are organized on a voluntary basis, ncluding those under the auspices of the Aeromodelling
Sports Federation of Russia. It is particularly remarkable that the state authorities also take an interest in drones. At the beginning of the year
Russian Post announced about using drones for postal deliveries, and in June Sberbank tested the first cash delivery by drone. According to Malkov, drones are actively purchased by the Ministry for Emergency Situations, and police also wants to establish airfields for tracking offences within the structure of the Ministry of Internal Affairs. And this it quite understandable, because drones are comfortable
tools for many tasks. At the rise of vehicles with internal combustion engine people also were taking guesses, whether authorities would step down to them or they would remain in the hands of enthusiasts. The history judged everything.

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