Drone makers hope to corner burgeoning global market.

• Author: Insinna, Valerie
• Position: VIEWPOINT

Unmanned aerial systems developed and built by the United States have dominated the worldwide market since the technology began proliferating 15 years ago.

However, experts predict manufacturers will encounter an increasingly crowded playing field over the next decade, as more companies begin producing ever more advanced systems.

Over the next 10 years, global UAS sales could amount to as much as $39.9 billion, said Larry Dickerson, unmanned vehicles analyst for Forecast International. He projects an additional $28.9 billion will be spent on research and development from 2015 to 2024, with another $2 billion to $3 billion spent on UAV service contracts during that period.

But as the market grows, so does the number of competitors, which could prompt challenges for the U.S. government and defense industry, said Phil Finnegan, director of corporate analysis at the Teal Group.

"From a security standpoint, it means the U.S. has less capability to control the proliferation of these systems," he said. "From a market standpoint, it means that U.S. systems are going to be facing increasing competition in world markets."

Even though more companies are permeating the market, only technologically advanced countries with large military budgets--such as Israel and China--will be able to build highly sophisticated and heavily armed drones that are reliable enough for the battlefield, Dickerson said.

Dickerson compared developing a Reaper or Global Hawk-like system to a minor league baseball team moving up to the major league. "Some of them can play well within their own leagues and maybe eventually move up to the majors, but not everyone is going to be able to do that," he said.

Even as new competitors emerge, U.S. unmanned aerial vehicles have a number of advantages that will keep them competitive, Finnegan said.

"First, they're proven. Secondly, they're deployed with the U.S. military, so that ensures the availability of spare parts and continuing upgrades," he said. "But foreign systems may be the solution for countries that can't get U.S. systems or can't afford U.S. systems."

In recent years, China has developed a spectrum of UAS and is rapidly increasing the capability of those systems, Finnegan said. "They're quickly prototyping systems, seeing what problems they have and then moving on and incorporating those lessons into a new system."

Dickerson expects that Chinese manufacturers will capture almost 40 percent of the UAS market over the next...