Yamaha crop duster before a test flight at a UC Davis testing area. Photographer: Ken James/Bloomberg

“Growth in the consumer-drone market is going to plateau in the next year”, said Gerald Van Hoy, analyst at technology research firm Gartner Inc.

“There are a number of people who will buy one and they will not use it again,” Van Hoy said. “It is a novelty item for them, then it will go to their attic.”

“Right now, DJI is the king of the drones-are-cool market, they are not king of the drones-are-a-tool market,” said Colin Snow, founder of Skylogic Research, which advises corporations using drones. “They’ve entered where they don’t have a lot of experience.”

Up for grabs is a market for aerial mining surveys, pipeline inspection, search and rescue, crop spraying and hundreds of other commercial tasks that’s expected to reach $127 billion by 2020. “The real question is which of these market opportunities at scale provides incentive for us to build products,” said Darren Liccardo, head of DJI’s Palo Alto R&D office, which opened last year.

Here is a sample of key targets for commercial drone makers and some of the leading manufacturers.

Agriculture  Last year the U.S. Federal Aviation Authority issued the first exemption for agricultural drone use outside of university research. DJI released its eight-rotor Agras MG-1 last year, with a 10-kilogram tank, followed by a thermal-imaging camera for remote sensing. It’s up against companies like Yamaha and local rivals like Shenzhen MicroMultiCopter Aero Technology Co.

Imaging and Inspection Where the civilian drone boom began. More than 5,000 exemptions have been granted by the U.S. Federal Aviation Administration, many of them for some form of photography or surveying. Between September 2014 and January 2016, almost 2,000 were filed for real-estate firms to take images of sprawling properties or show the view from an apartment tower that’s yet to be built.

“If you look at a large utility company, they’re spending $40 million a year for helicopter service,” said Jonathan Evans, chief executive officer of Skyward, a producer of flight-planning software for companies including those that inspect phone towers. “If you move the needle just a little bit, it has serious returns on the bottom line for the company.”

The majority of the U.S. exemptions were for DJI drones and from companies with less than 10 workers. Major competitors in aerial imagery are Paris-based Parrot SA, which acquired Sensefly to expand into commercial quadcopters, and 3D Robotics Inc. in Berkeley, California. Startups making waves in the sector include Yuneec Electric Aviation and Ehang Inc.’s UAVs.

Delivery  For retailers like Wal-Mart Stores Inc., Amazon.com Inc. and Alibaba Group Holding Ltd., which are all testing drones for deliveries, the UAV promises to solve the “last mile” problem — the costliest leg of a package’s journey to the customer’s door. “You break down the economics of supply chain management and you realize why Amazon’s going after this,” Skyward’s Evans said. “They can make a lot of money here.”  [Mentioned are Zipline/UPS, Matternet and Flirtey.]

Racing  Still mostly a hobby sport, drone racers have big plans for the sport, with commercial leagues to rival Nascar or Formula 1. Think Star Wars pod racing without the pilots. Producers of ready-made speed-demons include Arrishobby.com, Horizon Hobby LLC, Walkera Technology Co., and Shenzhen Hubsan Intelligent Co.

As mentioned elsewhere, the idea of the consumer drone market saturating is just beginning to bubble up. I suspect we will be hearing a lot more about this for a number of reasons.
  • Early adopters who are already in the market are waiting for the next great thing which may be some time coming.
  • There is more and more negative press which could mean that those on the sidelines are inclined to stay there.
  • There is an entire consumer electronics industry working hard to sell us the next shiny object.
  • Finally, we should never forget that this is neither an inexpensive or despite the technology advances, a particularly easy hobby.

read more at bloomberg.com