​The Rise of the Drones

Gary C. Bizzo  |


I keep waiting for my Amazon (AMZN) purchases to arrive at my doorstep followed by a text message telling me my item has arrived by drone and is on my porch awaiting me to electronically sign for it.

I firmly believe in aliens and that Amazon delivers by drone but figure it just hasn’t come to my part of Canada. At any rate this technology is disruptive on so many fronts.

I have a close friend, a professional photographer, who made a substantial living using an aerial blimp 16 feet long to take aerial photographs of real estate for developers and agents. It cost around $20,000 (able to hold a large Nikon camera), needed an equally large enclosed trailer and a van to haul the trailer. One expects technology to improve over time but I don’t think my friend was expecting it to disrupt his business overnight.

Before going on, we’re talking about consumer drones not the military drones that do surveillance and combat duties from high altitudes.

Another friend was telling me last year that his sixteen-year-old son was making money for his college years by using a $900 drone, with camera included, to video shorelines where he lives for developers. He paid for the drone with one job – wow!

In a recent Harvard Business Review (HBR) article, the author clearly shows how the disruptive economics of unmanned vehicles are taking hold. While recreational GoPros (GPRO) still remain the largest users of drones they are now being outfitted with business-grade software and becoming serious data-collection platforms. It’s easy to agree with HBR that when “the marginal cost of scanning the world approaches zero (because robots, not people, are doing the work), we’ll do a lot more of it. Call this the “democratization of earth observation”: a low-cost, high-resolution alternative to satellites.”

Ten years ago drones were still in the laboratory stage but the trend has increased from research to toys to what they are now – tools. As Smartphones get more sophisticated, the Internet of Things gets more advanced, Artificial Intelligence (AI) allows for non-manned flight and drones become cheaper people are constantly finding new innovative and ingenious uses for them. Google (GOOGL) wants to deliver food, Amazon has a patent for a shoulder mounted drone for policemen and Facebook (FB) wants to provide internet access from drones flying in the stratosphere.

Developers are using drones to survey building sites before, during and post construction, farmers are figuring out how to use drones to spread seed or pesticide as well as any industry where data collection is important. Tasks that would be foolhardy for a person to attempt are now not only possible but casually done with an inexpensive drone.

Of course, there are downsides to the drone revolution. Legal issues such as privacy, air space obstacles (other drones, planes and birds) and government regulations are hurdles yet to be managed. The FAA has a height restriction for consumer/pro drones at 400 feet with visual sight rules in effect at all times so Amazon’s plan to deliver product is a long way off. Other countries, most notably, Canada, the UK and Australia are in the forefront of drone development but there are no clear leaders and they are all facing the same legal issues.

LA CoMotion is a global conference and expo on urban mobility taking place this week (November 15-19, 2017) in Los Angeles. The event brings together leaders in urban mobility and transportation to showcase the latest technology, innovations and achievements in the new mobility revolution.

The Sky Guys (TSG), Canada’s leader in drone technology and unmanned solutions, officially unveiled their advanced DX-3 Vanguard drone at this conference. The Sky Guys Ltd. is an early mover in the Unmanned Aerial Vehicle (UAV) / Drone business. In their first six months of business TSG had revenues of $250k. The DX-3 Vanguard, their latest drone promises to be the most disruptive long-range drone to enter the market, with a specialization in long range and remote inspections and motoring. The DX-3 Vanguard features hydrogen fuel cell batteries – capable of 25hrs of flight, LiDAR and InfraRed cameras, and is capable of beyond visual line of sight (BVLOS) flight.

Adam Sax, President and CEO, said, “meeting other industry leaders here at LA CoMotion will enable us to expand out networks in the United States and internationally, which is something that has been in the works for some time.”

TSG offers specialized UAV services to over 600 clients, using a unique approach to capture data, aerial video and photography, infrastructure inspection and 3D mapping. Through its wholly owned technology division, Defiant Labs, they develop proprietary drone technology and advanced data analytics for commercial and industrial use.

Last week, The Sky Guys announced a partnership with The Province of Ontario to test the DX-3 Vanguard for highway monitoring and enforcement. As part of the deal, The Sky Guys have partnered with NVIDIA, IBM, and the University of Toronto for this pilot project.

The Sky Guys were first introduced to the public via Canada’s Dragon’s Den, Next Gen series (for entrepreneurs under 40) where they pitched and secured interest from Dragons, Michael Hyatt, Co-Founder of BlueCat, and Nicole Verkindt, founder of OMX and an aerospace expert.

TSG certainly illustrates the direction pro drones are heading.

Drones are still in their infancy as far as commercial use, however, Business Insider said the market for commercial and civilian drones would grow at a compound annual growth rate of 19% between 2015 and 2020, compared with 5% growth on the military side. According to AUVSI, the impact of commercial drones could be $82 billion and a 100,000-job boost to the U.S. economy by 2025.

Smart drones are the next generation/revolution with built-in safeguards, compliance and AI technology, smart sensors, and self-monitoring that would provide innovations in transport, military, logistics, and commercial sectors.

As drone technologies continue to evolve and grow, they will soon reach mass adoption, provided the legislation covering drone technology and usage is loosened to some degree.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
GPRO GoPro Inc. 4.83 0.04 0.84 546,556 Trade
FB Facebook Inc. 145.25 -2.32 -1.57 6,865,566 Trade
GOOGL Alphabet Inc. 1,079.69 1.06 0.10 338,854 Trade
NVDA NVIDIA Corporation 151.43 2.66 1.79 5,281,795 Trade
IBM International Business Machines Corporation 132.05 9.53 7.78 10,294,994 Trade
AMZN Amazon.com Inc. 1,637.50 5.33 0.33 1,776,267 Trade

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