A Whirlwind Tour of Drones - An Executive Insight

Issue/Publish Date: Winter 2018

Drones: Executive Summary

Though military drones have been in operations for almost a decade, non-military drones, belonging to a newer category of civilian or consumer drones, have emerged as main-steet commercial offerings, grabbing media attention, only recently since last few years. The focus of this article is on drones belonging to this newer category of consumer drones. Any use of the word "drone" henceforth shall be in the context of a consumer drone. The word "drone" as used in this article is used interchangeably to denote drone use for recreational, professional, civilian-governmental, and non-military-experimental purposes. This article takes the reader on a whirlwind tour of drones, examining both the technical and the business aspects, at a high level.

First, the reader is introduced to a high level terminology used in the context of a drone. Next, the article highlights major categories of drones, followed by an outline of major subsystems that provide an under the hood look into a drone’s anatomy. Business drivers, workflows, use cases, value chain, and market size forecasts are presented next for the drone ecosystem. Subsequent sections cover rules and regulations, as well as risks and challenges. The article concludes with a summary of key takeaways along with a quick peek at some of the futuristic developments underway. A generous assortment of figures is included to facilitate reader comprehension, and to serve the role of handy reference of key points made in the article, before, during, and after the article is reviewed.

To summarize, consumer drones are off to a flying start, following in the footsteps of the trail blazed by the boom in smart phone and IT revolution. Many components, sub-systems, and systems used in both the smart phones and the IT are deftly leveraged in the creation of consumer drones. Similarly, some technologies used in military drones as well as airplanes have helped lower the learning curve for creation of consumer drones. However, consumer drones are a new breed, and are in the early innings of their evolution. Accordingly, changes in drone technologies and capabilities are proceeding at a rapid clip. One of the main areas of advances is focused on making drones more intelligent and autonomous, by harnessing the power of automation including the use of machine learning and computer vision algorithms. Another area receiving R&D thrust is improvements in flight time via improvements in battery technologies, experimenting with hybrid fuel designs and using lighter weight materials. The holy grail of consumer drones is to have a swarm of drones flying autonomously to accomplish a singular mission or a set of well-defined missions. To attain such a nirvana, stakeholders in the drone ecosystem are in hot pursuit of multi-dimensional routes, ranging from building support in drones for high-speed, low latency, wide-area wireless connectivity, to opening up System Development Kits (SDKs), Application Programming Interfaces (APIs), and other components of the drone-solution-stack for multi-vendor and multi-system interoperability (e.g. integration into National Air Space (NAS)). Ambitious, innovative, and entrepreneurial minds are already pushing the boundaries by prototyping ideas for using drones for human transport.

Consumer drones are expected to usher in a new era, creating new jobs in development of products and services. Whether you are a seasoned professional, or a freshly minted graduate, a new suite of opportunities is en-route, as corroborated by forecasts from industry watchers and researchers. For example, a recent study by a well-known analyst firm has forecasted a drone-powered-solutions bonanza of over $127B dollars in worldwide available market in next few years. Equally exciting prospects await businesses and corporations across different verticals for exploring and pursuing their piece of this new drone business pie. Bon voyage on your happy article reading journey!

Drones: An Introduction

Simply speaking, a drone is a flying computer capable of flying autonomously or under remote control. It can be specialized for a specific type of mission (e.g. photography, filming, racing, environmental sensing, emergency medical response, perishable or non-perishable item delivery, etc.) via use of specialized sensors or on-board accessories or payload(s).

In the United States, a drone is also referred in some official documents and communications as a small Unmanned Aircraft System (sUAS). In many countries including the US, a drone is also referred to as an Unmanned Ariel Vehicle (UAV) or a Remotely Piloted Aircraft (RPA) or Remotely Piloted Aircraft System (RPAS). Use of the word “small”, or the prefix “s”, in sUAS, refers to a drone’s overall weight of up to 55 lbs.

One could logically infer that a flying computer would likely incorporate elements of both an aircraft as well as a computer, and that is essentially what forms the core of a drone. A drone’s propulsion system is indeed modeled on the principles and elements of an aircraft, while a drone’s data processing, analysis and decision support system is modeled on the principles and elements found in a computer system. (See figure 1 for drone lineage). Key components that make up a drone are covered further in a later section below.

Technical wizardry that makes drones possible is great, but what about the business aspects and opportunities? By the end of 2016, close to 12 million consumer drones had been sold worldwide, and a majority of them in the US. In the US, over last 18 months almost 800,000 drones had been registered with the FAA. According to a PwC May 2016 report, drone services market has been forecasted to exceed $125B in available market size, worldwide, by 2020. (See figure 2 for worldwide total addressable market for drone based services opportunity forecast). Business related topics are discussed further in a later section.

Drones: High Level Classification

Based on observations from recent marketplace offerings, two broad categories of drones have emerged: Multi-rotor (a.k.a. rotary-wing) and fixed wing. (See figure 3 for side-by-side comparison of fixed-wing and rotary-wing drones). Multi-rotor has more than one rotating propellers powered by motors that provide lift and propulsion. Quad copter (with four motors and four propellers) is a popular multi-rotor consumer drone in the marketplace currently. Fixed wing drones use wings like a normal aero plane for propulsion and lift. Multi-rotor drones are cheaper and easier to fly compared to their fixed wing counterparts. However, fixed wing drones provide longer flight time compared to multi-rotor drones. Hybrid drones that are a cross between multi-rotor and fixed-wing types, are likely to emerge in future, leveraging advantages of both the fixed-wing and multi-rotor categories, while at the same time attempting to minimize disadvantages of each of the two categories.

There are other ways to classify drones; e.g. based on costs and capabilities. And such a classification could run the gamut from lower cost consumer/hobbyist drones at one end of the spectrum, to expensive professional grade drones at the other end of the spectrum, with different levels of costs and capabilities in-between the two ends, e.g. prosumer drones.

Drones: Key Components

At a high level, a drone’s anatomy can be dissected into following subsystems (See figure 4 showing eight drone subsystems):

• Computing and Storage (e.g. flight controller, CPU/GPU, memory, storage card, etc.)
• Power and Propulsion (e.g. smart battery, electronic speed controllers, motors, propellers, etc.)
• Control and Communications (e.g. antennas, remote controller, transmitter, receiver, etc.)
• Firmware and Software (e.g. drivers, drone operating system, middleware, application software, etc.)
• Interconnects and Ports (e.g. wires, connectors, ports, etc.)
• Chassis and Body (e.g. airframe, booms, landing gear, protective shell, etc.)
• Accessories and Payloads (e.g. gimbal, camera, sensors, etc.)
• Odds and Ends (e.g. propeller guards, direction indicator lights, etc.)

Computing and Storage subsystem comprises of items that constitute the electronic brain of the drone. Flight controller accepts inputs from various sensors, processors, and receivers, and based on such inputs and analysis, creates output that controls behavior of the drone, as instructed either by a programmatic control, or some real-time actions under manual control.

Power and Propulsion subsystem is responsible for distribution of power to a drone’s on-board electronic components, as well as for takeoff, flight, and landing aspects, as instructed by the flight controller.

Control and Communications subsystem is where remote control based commands get communicated to the drone wirelessly over allocated radio frequencies. Also, real-time status is sent back from the drone to the remote controller display for viewing by the remote pilot in command. Information sent from a drone to it's remote control could include parameters such as speed, location, direction, as well as video feed from an on-board video camera, if one is present, and if such a live feed is supported and enabled.

Firmware and Software subsystem is what provides smarts used by the drone to fly, for example, flying collision free via obstacle detection and avoidance. This subsystem is also responsible for security capabilities, including network and application level security, ability to update a drone systems' software to newer versions, debug issues, interface with other external systems, and more.

Interconnects and Ports subsystem consists of wires and interconnects for connecting various components and circuit boards in a drone. Connecting external accessories or systems to the drone is provided via ports (e.g. USB / Ethernet connectivity for data downloads, etc.).

Chassis and Body subsystem can be thought of as a drone’s skeleton (airframe, booms) and protective skin (e.g. shell). Also part of this subsystem is the fixed or retractable landing gear, used during drone takeoff and landing.

Accessories and Payloads subsystem is what provides drone the ability to gain mission specific specialization capabilities. For example, a gimbal is an accessory that provides image stabilization for cameras along multiple directions based on real-time feedback from flight controller and motion and direction sensors. Payload can consist of a variety of sensors such as temperature, humidity, pressure, image, video, light, ultrasonic, etc. sensors.

Odds and Ends subsystem can be thought of as a miscellaneous category which includes standard or optional items such as propeller guards for safety, direction indicator lights, flight simulator, user manuals, etc.

Drones: A Simplified Connectivity View

Having understood the key components that go into the making of a drone, next step would be to get a high level view of how some of those components connect together. That is exactly what figures 5 and 6 are designed to depict. Figure 5 show a simplified view of key connections. Figure 6 shows additional connections. (Tip: For some, if Figure 5 appears complicated, just focus on any one of the four arms of the quad-copter to trace the connectivity. The remaining arms follow similar connectivity pattern). The Flight Controller is the central authority or the “brains” of a drone. It performs necessary operations to keep the drone stable and controllable. Accordingly, most connections lead to the Flight Controller Board. The Flight Controller receives information regarding the drone’s spatial orientation from the connected sensors. Also, any commands from the pilot operating the drone’s remote control are wirelessly received via the drone’s Radio Receiver connected to the drone’s Flight Controller. The Flight Controller transforms these inputs into outputs in the form of starting, stopping, or modifying the speed and/or direction of rotation of the motors (and its attached propellers), via Electronic Speed Controllers (ESCs). ESCs are electronic circuits that act as links between the Radio Receiver, the Battery, and the Motors, since the output signal from the Radio Receiver is not strong enough to control the Motors directly.

Power Distribution Board (PDB) is a companion circuit board to the Flight Controller Board (FCB). And like the FCB, most connections lead to the PDB. The PDB plays the role of a central distribution point of on-board battery power to various on-board components.

Depending on the type of the drone and/or its payload, both the FCB and the PDB will have additional connections, as shown in figure 6.

Drones: Business Drivers And Opportunities

While military drones paved the way in terms of initial concept and technology risk unpacking, the smart phone revolution is further paving the way in terms of making financial risk less of an issue for consumer drones. Advances in many technologies and components used in modern day smart phones are finding application in consumer drones; for example, sensors (location, gyroscopes, accelerometers, cameras), communication chip-sets (Wi-Fi, cellular), and display units (e.g. smart phones, tablets). Advances in other areas such as 3D printing, open source operating system software, Internet of Things, Machine Learning, Deep Learning, Computer Vision, and User Interface techniques such as gesture based controls, etc., are increasingly finding their way into the next wave of consumer drones. Despite drones’ entry into the market place started only in last few years, venture capitalists are increasingly viewing consumer drones hardware as a rapidly commoditizing area. The silver lining of such an observation is the role that better cost economics would play in growing the addressable market size due to reduced cost of ownership of consumer drones. Some incumbent market leaders and some new players with competencies in mobile phone chipsets are leading the charge in integrating multiple functions, currently being performed by different sensors and chipsets, into a single integrated chipset. Such innovations are only going to be additive to the existing value proposition of drone hardware both from cost and capability improvement angles.

Improving affordability is welcome news, but what are the use cases and opportunities to setup and monetize a drone business? Use cases are numerous, and cut across many different industries. For example, ariel photography and videography, crop monitoring and pesticide spraying, inspection of infrastructure such as pipelines, cell-towers, and other geological, ecological, and wildlife sites or habitats, border patrolling, damage survey and search missions after a natural calamity, delivery of medical or non-medical items, etc, to name a few. There are many other use cases, including some futuristic, and some esoteric. For example, some investment analysts have utilized drones to find out the amount of cars in the parking lots of different malls during different holiday seasons to forecast mall traffic growth. Such data is then used in their analysis for recommending stock trades (i.e. buy, sell, or hold) in companies who have either direct or indirect retail channels in those malls. Another non-typical example of a drone application is a recent announcement by one developing country’s planned use of drones to monitor any slum development within the boundaries of a newly planned smart city, so that timely and appropriate actions can be taken to prevent spreading of slums in that smart city.

To understand the opportunities afforded by drones, it is helpful to first understand a high level drone service workflow, and also get a sense of a drone's service value chain. Workflows and value chain are inter-dependent. Also, both of them, especially workflow, will also depend on the specific use case. (See figure 7 for drone service workflow).

At a high level, drone service workflow can be broken down into Pre-Flight, During-Flight, and Post-Flight phases. Pre-Flight phase includes mission definition and planning (e.g. drone acquisition and configuration, mission plan, etc.). During-Flight phase includes operations and control (e.g. regulatory approvals, resource scheduling, and data acquisition). Post-Flight phase includes processing and delivery of customer deliverables (e.g. report generation, contract signoff, payment, etc.).

Considerations and requirements would be different for an existing use-case that is being substituted by a drone based service, as compared to a new service made possible by the drone. For example, if inspection of an oil pipeline is done via a static but periodic reading of sensors installed at various points along the pipeline infrastructure, then a drone based counterpart of such an existing service can be carried out more frequently, with greater accuracy, and with additional parameters such as visual images/videos depicting pipeline structural integrity and any external infrastructure deterioration, etc. An example of a new service made possible by using a drone is the use of a mini-drone to pollinate plants. There will be also be a number of use cases where a drone service will augment existing service, rather than substitute it. An example of such a hybrid use case is a real estate listing that includes a few close-up aerial shots or videos of a residential or commercial property for sale taken by a flying drone, along with traditionally taken terrestrial shots and videos. (Figure 8 shows illustrative samples for each of the three use case categories).

Drone services value chain is in a nascent stage of formation currently. Over time, the value chain structure will crystallize. One possible rendition of drone services ecosystem, based on roles and responsibilities is outlined in Figure 9, with the caveat that some responsibilities shown therein may get aggregated under a consolidated role, or conversely, may be split out as separate roles.. Additionally, new roles may emerge based on new use-cases, equipment and services evolution, and industry competition and dynamics. Roles are categorized under three broad categories for logical and comprehension purposes, with Drone Service Consumer (a.k.a. Drone Service Customer or Drone Service Client) at the ecosystem epicenter:

1. Drone Manufacturer (design and manufacture)
   • Integration (acquire/design components, sub-assemblies)
   • Distribution (wholesale, retail, online channels)
   • Services (after market, professional/custom)
2. Drone Service Provider (planning, operation, processing, delivery)
   • Owns or charters drone operation service, including drones
   • Owns or charters drone connectivity and cloud storage
   • Owns or charters data acquisition and processing (e.g. reporting, analytics, media post-production using specialized software)
   • Owns or charters drone traffic management services (e.g. air-corridor scheduling and separation, multi-operator co-ordination, no-fly-zone compliance, weather services, etc.)
3. Third Party Services (standard/custom payloads and supporting services)
   • Accessories/Sensors/Payloads to meet specialized mission requirements
   • Value Added Resellers and Systems Integration
   • Regulatory approvals, waivers, legal advice, and compliance support
   • Training and Certification of equipment, operators, etc.
   • Insurance coverage for aircraft, payload, crew, flight, and mission

Armed with understanding of drone multi-industry use cases, workflows, and ecosystem, it is easier grasp the magnitude of the market size and business opportunities. As mentioned earlier, worldwide drone services total available market size is forecasted to top $127B by the year 2020.

Drones: Rules And Regulations

Article readers may be pumped up reading the previous section on drone based opportunities offering a gateway to enter a new club filled with excitement, fun, and lucrative possibilities. However, as in other walks of life, any club that attracts crowds seeking the thrill and the upside, requires the clubgoers to have to first successfully negotiate past a club bouncer at the club entrance, by showing a proof of one or more official credentials, to gain an entry into the club. Entry into the drone club is no different.

In the US, from the rules and regulations perspective, drone use is classified into four distinct categories:

• Personal or recreational
• Commercial, non-governmental
• Governmental
• Experimental

There are a common set of rules applicable to all categories, and there are additional rules applicable to specific use categories. Latest and full set of rules in the US can be found by visiting the FAA website. Rules and regulations are designed with considerations for safety, privacy, risk mitigation, and security. Some examples of common set of rules include limits on maximum drone weight, altitude, speed, time-of-day to conduct flights, locations to not fly in or keep away from, and weather related aspects (e.g. wind speed, precipitation, distance from clouds, visibility, etc.). Exemption and waivers can be obtained from appropriate authorities by submitting written requests, accompanied by a detailed plan outlining specific steps that will be taken, to mitigate any and all concerns that were the reasons for enacting such restrictions in the first place. A lead time of 90 days may be needed in virtually all of the cases seeking exemptions and waivers. (See figure 10 for commonly requested waivers in the US).

Additionally, there are registration and certification requirements. In the US, check the FAA website for specific and latest requirements and updates. The FAA is responsible for regulating civil aviation in the US. The FAA’s goal is to ensure the safety of both the flying and non-flying public.

The Federal Aviation Regulations (FARs) are the FAA’s rules governing all flight operations. The FARs constitute Title 14 of the Code of Federal Regulations (CFRs). They are updated as necessary and published each year.

FARs are divided into “parts”, each of which covers a specific area of operation. The part most pertinent to the drone pilot is Part 107. It lays out the certification requirements for sUAS operation for professional use. As part of such certification, a drone pilot will be tested on knowledge related to applicable regulations, airspace classification, operating requirements and flight restrictions, aviation weather sources, effects of weather on drone performance, drone loading and performance, emergency procedures, crew resource management, radio communication procedures, physiological factors affecting pilot performance, aeronautical decision making and judgment, airport operations, maintenance and pre-flight procedures, etc. (Figure 11 summarizes areas covered in aeronautical knowledge tests).

Many different public and private institutions offer training for such certification, and some of them may even be authorized by the FAA as testing centers for such a certification.

Drones: Challenges And Risks

Consumer drones is an emerging category, so things are going to be in flux over next 12 to 24 months, as ecosystem stakeholders go up the learning curve, new entrants and entries jostle for position, and regulations and technologies evolve further. For example, currently, battery capacity vs. weight is a limiting factor constraining maximum flight times to less than 30 minutes on a single battery charge. Another limitation is from a regulatory perspective. Currently rules permit only line of sight (LOS) flights, though waivers have been granted for flights beyond visual line of sight (BVLOS) for experienced pilots who have presented credible risk mitigation and contingency plans. Ongoing research, experiments, and waivers related to BVLOS drone flights are going to provide insights into, and improve, the understanding of BVLOS issues and opportunities, leading to updates to rules that would relax LOS restrictions, hopefully in next few years, if not earlier.

Drones: Conclusion, Key Takeaways, And Future

Many innovations happening at warp speed on the computer, smart phone, IT, wireless, and software side are going to find tremendous applicability on the drone side. For example, advances in battery technologies, sensor technologies, artificial intelligence, machine learning, deep learning, computer vision, cloud computing, Internet of Things, 5G cellular, intelligent transportation, mobile robotics, and biometrics are just some of the areas being actively explored for application (or already being applied) to drones. (See figure 12 for a summary of key takeaways).

Some deep pocketed companies, as well as some innovative startups, are already working on more futuristic capabilities of drones. For example, autonomous drone swarm, hybrid electric-alternate-fuel drones, hybrid multi-rotor-fixed-wing drones, multi-modal drones capable of propulsion on land, water, and air, and autonomous drones for human transport.

Drone sits at the intersection of computer and aircraft. Just as auto industry defined a whole new category and profitable space via SUV as the hybrid or crossover between a family sedan and a truck, a drone stands at different but similar exciting intersection with potential galore for new opportunities and revenues.

Though “peak of enlightenment” and “plateau of productivity” phases (as defined by Gartner’s hype cycle) may be a couple of years out, now is the time to get in on the ground floor of the exciting space of drones, start going up the learning curve, begin establishing a beachhead, and start building brand awareness. Exciting multi-billion dollar drone based business opportunities are beckoning! Are you getting ready to grab your piece of it?

Editor's Note: Provided above was a sneak peek into the research we conduct on drones and beyond. This article offered a 10,000 ft view of drones. If you wish to dig deeper into the topics discussed above, we have a detailed report that offers a 1,000 ft view. That report also covers additional topics beyond those covered in this article. Please browse our Products page to find out more about the report, including pricing. If you wish to get below the 1,000 ft view, we offer custom services. If you are a drone ecosystem stakeholder, or contemplating becoming one, our staff can help you with training, strategy, technology, or other relevant business aspects. Please browse our Services page to learn more about the services we offer. To get in touch with us, please use the Contact page. If you are looking for our previous article on Internet of Things (IoT), you can find it by clicking here.