Authors: Joerg Schlinkheider, Prashant Ramarao, Tim Tully, Vineet Banga, Vipul Deokar

Commercial Drones Are Coming - Sooner Than You Think?

This work was created in an open classroom environment as part of the Engineering Leadership Professional Program (ELPP) developed and led by Prof. Ikhlaq Sidhu at UC Berkeley. There should be no proprietary information contained in this work. No information contained in this work is intended to affect or influence public relations with any firm affiliated with any of the authors. The views represented are those of the authors alone and do not reflect those of the University of California Berkeley.

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Joerg Schlinkheider Volkswagen

Prashant Ramarao Yahoo Inc

Tim Tully Yahoo Inc

Vineet Banga GE Software

Vipul Deokar Juniper Networks

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• Drones are present - like it or not • Drones are integrating into everyday life

• Underlying infrastructure and economies will develop

• Industries slow to adapt will be disrupted• Governments will play a critical role

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Drones/UAV - What’s in the name?

• UAV - Unmanned Aerial Vehicles• Drone industry & proponents prefer UAV:

• Degree of autonomy• Connotation

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Source: aia-aerospace.org

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• Current Applications• Military• Hobbyists

• Nascent Applications• Cargo Delivery • Precision Agriculture• Oil and Gas• Law Enforcement• Disaster Management• Media and Entertainment• Mapping• Internet Connectivity• Maintenance Services

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ISInvestments and Acquisitions

• Google - Projects Wing, Loon• Google acquires Titan Aerospace• Amazon’s Prime Air• Facebook’s internet.org• Airware - $40M, 4 rounds• Skycatch - $20M, 4 rounds• PrecisionHawk - $11M, 2 rounds• Matternet - $2M, Angel round• MIT CSAIL - Charging research

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ISHype Curve

Source: Gartner Aug 2014

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ISCommercial Drone Spend = $12 Billion

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ISAdoption Curve

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Source: AUVSI Economic Report 2013

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Predicted Impact on Key Applications

Projected growth by industry

Agriculture ● Biggest impact - prediction: Will grow to ~130K unit sales ● Monitor irrigation, planning harvests, monitor crop health, livestock ● Sparsely populated, little air-traffic and vast amount of private property

Parcel Delivery ● Total $220B market; UPS, FedEx, DHL, Google, Amazon exploring● 1st mile & last mile● Faster, Ecologically better, Cheaper, Remote locations

Law Enforcement ● Private security $350B market, will grow 21% through 2020● 2M full-time security workers (Source: ASIS and Institute of FInance Mgmt)● Preventive Measures, Cities cutting back law enforcement personnel

Technology ● Startups Airware - Hardware, Software & Cloud Services for Drones● MIT, DARPA, USAF - Research on UAV charging for high endurance

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● Privacy - drones over private property● Safety - drones crashing● Insurance - liability damages and personal

injuries ● Regulation - FAA (section 333 exemptions)● Security/Hacking - SkyJack

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● Commercial drone usage will see major growth in specific industries we predict them to be agriculture, entertainment and law enforcement

● Technology companies which provide infrastructure and complete solutions will drive the adoption rates

● 2015 will be critical year for drones in US● Drone adoption will be faster in other countries