Unmanned aircraft makers look overseas for new markets.

• Author: Magnuson, Stew
• Position: Unmanned Aircraft

Unmanned aerial vehicles have unquestionably been one of the biggest success stories for the U.S. military on battlefields over the past decade.

Predators, Scan Eagles, Global Hawks and Ravens are brand names as recognizable in the defense world as Corollas, Mustangs and Corvettes are in the automotive world.

The question is now whether U.S. manufacturers can capitalize on the game-changing technology and expand their customer base internationally.

There is a huge pie to be divvied up, according to one industry watcher.

Derrick Maple, principal analyst at IHS Industry Research & Analysis, forecasts $81.3 billion in worldwide UAV business from 2012 to 2021. That includes new builds, research and development, and services, he said.

"We are still very much at the early stages of the lifecycle of this market," he said at the Association for Unmanned Vehicles Systems International conference in Las Vegas. It will grow despite budget constraints in the United States and Western Europe, he added.

U.S. customers--primarily the military--currently comprise two-thirds of the global UAV market. The last five years have seen double-digit growth in sales, but this is "not sustainable" in light of the military spending downturn in the United States and Western Europe, Maple said.

Looking beyond U.S. shores for new markets is crucial, Maple and other analysts said. There are factors that will fuel the global growth in UAV technology and give U.S. builders a leg up over their competitors. But there are some potential road-blocks, too, they said.

On the plus side, many of these aircraft have flown hundreds of thousands of hours in combat, and have the cachet of being in the Defense Department's inventory.

"Foreign buyers like manufacturers that are selling to the U.S. military. They have an advantage," said Philip Finnegan, director of corporate analysis at the Teal Group.

While U.S. and Western European companies will take budget hits, defense spending accounts will "flow freely" in China, Russia, South East Asia, Australia and India, Maple said. Social unrest and instability in the Middle East and Latin America will increase demand for the intelligence, reconnaissance and surveillance capabilities these platforms provide, Maple said. More than 50 militaries are currently flying unmanned systems, and it is only a matter of time before the rest of the world adopts them, he added.

Christopher Ames, director of international strategic development at General...