An Overview of the Asia Pacific Unmanned Aircraft Systems Market

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An Overview of Asia Pacific Unmanned Aircraft Systems Market

for

US Embassy

Julius Yeo

Consultant, Frost & Sullivan

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HELP!

THE OBJECTIVE -CAPTURE THIS CUSTOMER

COMPETITIVE THREAT

RABBIT HOLES - VERY TEMPTING TO DIVE DOWN

RESTRICTED VISION

EXCELLENT VISION

Strategic Thinking – A Helicopter Vision

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Industry Restraints & Challenges

Market Spending Overview

Industry Dynamics

Market Forecasts

Market Trends

An Overview of

Asia Pacific

Unmanned Aircraft Systems Market

Conclusions and Key Take Aways

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Market Spending Overview

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

North America Europe Asia Pacific Middle East Rest of the world

US $ Million

Global Defense Budgets ( 2008 – 2017)

Global Defense Budget are increasing, more so for Asia Pacific in the future. Military budgets will continue to be under strain because of increasing costs of complex defense systems

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Europe, 14%

Asia Pacific,

18%

ROW, 1%Middle East, 5%

USA , 62%

USA Europe Asia Pacific Middle East

Global Military UAV Market Share by Geography (2008)

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USA APAC Europe Middle East ROW

US $ Billion

UAV Market Spending by Geography (2008)United States will continue to contribute the most in UAV spending. Asia Pacific currently 2nd

in UAV spending, is still in its infancy stage for UAV developments and it will continue to look to the west for procurement of UAV systems for the short and mid term outlook.

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Industry Dynamics

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Contributing Factors and Influences that drives the UAV Growth in Asia Pacific

Regional conflicts among neighbors

Unstable states with internal political tensions

Development of Network Centric Network concept

Strategic national technology position

Support from individual governments for UAVdevelopment programs

Strong regional economic growth

Expansive sea area and long coastlines

Source: Frost & Sullivan

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Geographical Influences

Conflict locations due to political tensions, border stand-offs, land claims, and domestic insurgencies.

Security threats such as piracy, military stand-offs, and others requiring maritime operations.

Potential locations for occurrence of natural disasters.

Source: Frost & Sullivan

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Industry Restraints & Challenges

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MediumMediumMediumTimely development duration

Unmanned Aircraft Systems Market: Impact o Industry Restraints, 2008-2016

Industry Restraints Impact 1-2 Years Impact 3-4 Years Impact 5+ Years

Existing manned aircraft capabilities Medium Medium Medium

Procurement cost Medium Medium Medium

Technology handling capabilities Medium Medium Medium

HighHighHighIndustrial

HighHighHighOperational Capabilities

Unmanned Aircraft Systems Market: Impact to Industry Challenges, 2008-2016

Industry Challenges Impact 1-2 Years Impact 3-4 years Impact 5+ Years

Doctrines and Polices High High High

Economics High High High

Regional Factors High High High

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Market Forecasts

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Market Spending Forecasts

UAV Market: Spending Forecasts for Asia Pacific, 2007-2016

Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan

Frost & Sullivan forecasts that the CAGR for the revenue growth rate from 2007 to 2016 will be 4.4 percent.

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Spending ($ M

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-30.0

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rowth Rate (%

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Revenue ($ Million)

Revenue Growth Rate (%)

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UAV market: Total Unit EIS Forecasts (Asia Pacif ic), 2007-

2016

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Shipment Forecast ($ Million)

Total UAV EIS Trends

Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan

Total shipment forecast in the future will fluctuate in the reels of US$600 million on a sustainable basis.

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UAV Market: Unit Shipment Forecasts and Trends by UAV Types

(Asia Pacific), 2007-2016

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Shipment Forecast ($ M

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HALE

MALE

VTOL

TUAV

Forecasts and Trends by UAV Types

Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan

Tactical UAV will continue to dominate the UAV market in Asia Pacific.

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Market Trend

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Forecast of UAV Market: Percent of Market Share by UAV Types (Asia Pacific), 2007 - 2016

HALE

11%

TUAV

43%

VTOL

15%

MALE

31%

Source: Frost & Sullivan

•Tactical Unmanned Aerial Vehicles or TUAV, are expected to lead the UAV market in Asia Pacific from 2007 to 2016.

•The High Altitude Long Endurance (HALE) UAV market will be driven predominantly by more advanced countries in terms of military capabilities. Frost & Sullivan expects Singapore, Australia, South Korea, and Japan to be the leaders in the HALE UAV procurement.

• Frost & Sullivan projected the strongest growth for Medium Altitude Long Endurance (MALE) UAVs between 2011 to 2015. As a result, MALE will take away some market share from HALE

• VTOL was inducted for usage in Japan in the early days, however this system has not garnered sufficient support from theother countries in the Asia Pacific. However, Frost & Sullivan expects the market share of VTOLs to increase in the later stages of the forecast period due to enhanced technologies handling capabilities and new naval defense article procurement.

Market Share by UAV Type

With the adoption of network centric warfare by countries within the Asia Pacific region, TUAV will have a critical role.

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Unmanned Aerial Systems Market Segmentation – market will move beyond the “ Dull, Dirty, Dangerous” tasks highlighted in the past – “Deep” and persistent operations are the key application now

Payload Capacity (kg)

400 - 2000

60 - 400

5 - 150

0 - 5

Altitude (ft)

Range (km)

40,000

20,000

50 500 5000

MUAV

TUAV VTOL

MALE

HALE

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MALAYSIA

TAIWAN

*All values along the Y Axis represent the UAV sales in Dollar value in Millions.

• Malaysia UAV market is estimated to worth

about US$90 million over 2009 -2015

• Maritime operations and coastguard continueto drive most of the UAV sales

• Taiwan UAV market is expected to be

worth US $600 million over 2009-2015

• Threat of mainland China and territorial dispute will drive the sales

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*All values along the Y Axis represent the UAV sales in Dollar value in Millions.

• Indonesian UAV market is expected to be worth US$125 million over 2009 – 2015

• Ultra terrorist movement and territorial dispute drive the sales

• Thailand UAV market is expected to be worth US$300 million over 2009 – 2015

• Thailand demand for UAV will be primarily driven

by internal security threat

INDONESIA

THAILAND

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Frost & Sullivan has identified various countries in Asia Pacific that it believes will the leaders in UAV technology and systems export. Although many countries have set up indigenous development programs, the lack of technical expertise and funding has hindered the progress, thus forcing these countries to procure off-the-shelf UAVs from non-domestic suppliers. The following chart segments the region to three tiers based on the UAV export capabilities of respective countries. It should be noted that although Japan should fall into Tier 1, international arms and weapons trade restrictions has significantly hampered its UAV development programs. In the event, these restrictions are lifted, Japan is expected to be one of the global leaders in UAV technology. China is working toward self-reliance due to various restrictions imposed on the country. However, if China is successful in its efforts, it will not be too long before Chinese-made UAVs are seen over Asia Pacific’s airspace.

TIER 1

South Korea, Australia, Singapore

TIER 2

China, India, Japan

TIER 3

Indonesia, Malaysia, Thailand

Source: Frost & Sullivan

Japan can be the global developer of UAV technology if international military restriction is lifted. China is seen as a “up and coming force” in the UAV market

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Conclusion & Key Takeaways

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Conclusion & Key Takeaways

• Frost & Sullivan believes that the Unmanned Aerial Vehicle (UAV) market in Asia Pacific will experience a sustained growth from now to 2016.

• UAV development program is still in its infancy stage as compare to Western counterparts, but spending is projected to increase on a sustainable basis.

• Most countries have set up UAV development programs, but are yet to obtain the necessary expertise to support advanced indigenous UAV designs. The urgent need to improve on military capabilities will drive almost all Asia Pacific countries to procure non-domestic UAV designs. .

• The UAV market in Asia Pacific will be led by Tactical UAVs (TUAVs), and followed closely by Medium Altitude Long Endurance (MALE) UAVs.

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Key Contact

Asia Pacific

Julius YeoConsultantAerospace & Defense PracticeAsia PacificDID +65.68900.989FAX +65.68900.988HP +65.8133.9195EMAIL [email protected] www.aerospace.frost.com