Join Tim Shea ARC Senior Analyst on this fascinating podcast for answers and insights on:
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Would you like to be a guest on our growing podcast?
If you have an intriguing, thought provoking topic you'd like to discuss on our podcast, please contact our host Jim Frazer
View all the episodes here: https://thesustainabilitypodcast.buzzsprout.com
Join Tim Shea ARC Senior Analyst on this fascinating podcast for answers and insights on:
--------------------------------------------------------------------------
Would you like to be a guest on our growing podcast?
If you have an intriguing, thought provoking topic you'd like to discuss on our podcast, please contact our host Jim Frazer
View all the episodes here: https://thesustainabilitypodcast.buzzsprout.com
Jim Frazer1:38 PM
Welcome to another edition of the Smart City podcast by ARC Advisory Group. Today our subject is drones and related technologies and I'm very happy to be joined by Tim Shea, senior analyst at Arc Advisory Group. Welcome aboard today, Tim, how are you?
Tim Shea1:38 PM
Am very good Jim. Thanks for having me.
Jim Frazer1:38 PM
Hey, great, great, great to talk to you again.
Tim, just to get started, can you tell us a little bit about yourself and your areas of studies beyond and including drones, of course.
Tim Shea1:39 PM
Sure. Well, I've been doing market intelligence and advisory advisory services for over 25 years now, Jim, nine of those have been at ARC as a senior analyst, primarily focused on the oil and gas.
with upstream and midstream technology solutions and services markets and most recently focusing on the the deployment of drones and robotics for use in various process industries such as chemicals, oil and gas, mining and others.
Jim Frazer1:39 PM
Great.
Umm, you know Tim, before we go deep into the drone market, I understand this week you're you are visiting the the AUVSI Xponential conference I believe in Orlando with our colleague Dillon Fosa. Can you tell us a little bit about that conference?
Jim Frazer2:16 PM
Well, Tim, thank you for mentioning that. We've touched on you know, many, many aspects of how the drone market and the autonomous robot market will develop in the future. Is there anything that you've left out today that you'd like to mention?
Tim Shea2:16 PM
If I could find if I listen to this and then again in a day or so, they're probably will be things I missed. But I think just to reiterate about the competitive landscape.
The big players that we encountered were companies like DJI and then MMC there's a couple of other companies that that China that escaped by memory at the moment. But Parrot, you know, that and Skydio. They're not necessarily the biggest players, but I think the drone service, the drone in the box providers like Percepto, like Airobotics, American Robotics, and Azure, among others. Those are guys that I think that are leading the market for DiaB solutions.
Again, as the FAA opens up its regulations, I think we're gonna see those type of companies and others I think what's gonna happen is real growth in adoption. I mean Intel for example was involved in drones earlier in the past. And Amazon is working with Walmart, and other companies that are focused just on delivery. Those are markets that we have necessarily covered. However, We have a supply chain group that be might looking at that segment, and it's potentially another big market is that of the delivery market.
For medicine and then and you know certain higher dollar value items. But the problem with that is in most cases that payload is gonna be smaller since most of these are multi-rotor drones and they are not gonna be able to handle heavier packages. So you're gonna be limited to what you can ship. I think medical pharmaceuticals could be a really good application because those are potentially not only lifesaving, but there's certainly higher dollar value so the economics makes more sense.
Delivery loads, but they're not necessarily that heavy, so it's more higher dollar value items and the numbers make more sense, whereas if you're trying to have a drone go out and deliver a bunch of, you know that lip balm or something like that which is a lower-dollar value item. I mean it's, you know, are you gonna pay for a drone to deliver something that the total value is, you know, $25 aor less and just some of the stuff is just economically not gonna make sense when you step back and look at it that way. But I think if you look at it from the standpoint of.
I pharmaceuticals drug, drug delivery, certainly that could play a role, I think.
In that regards. So anyways, just go back to the the leading guys. DJI I was by far the leading player based on our research and Parrot, which is at the time owned part of senseFlY. But senseFLY is since been sold off to hag Ego which isn't company that's been doing a lot of activity as well. They're focused more on the hip market and agriculture, but they are incorporating sense fly. They some other companies they've picked up MMC UAV out of China, FLYABILITY which is has a unique drone solution that has its own little protective cage.
It flies around and it's like a little cage so that the drone can fly around in confined spaces such as storage tanks. And so it's way of handling, you know, going into storage tanks and things like, that's where they're specialty is at least GPS challenge environments where confined spaces and things like that. This thing can bounce off the walls because it's got this protective sort of this caging situation. Chengdu JOUAV out of China. EWATT, Delair is a fixed wing. EWATT is a combination of fixed wing and rotor based.
Airobotics is one of those companies I mentioned. It's a drone in the box suppliers. Microdrones got a partnership with GE Industrial drones, and they do a lot of work in surveying and mapping. That's a big specialty of theirs. Azur Drones is a drone-in-a-box supplier and InSitu is a company that's owned part of Raytheon that does some specialty pipeline inspections, DroneVolt and its sister company Aerialtronics are noteworthy.
Skydio and Percepto I mentioned before. Then there's other companies that do various types of fixed wing or vertical takeoff and landing fixed wing, or VTOL. Some have both. So there's a lot of interesting companies that are playing in the market for Drones. Then there is the market for the drone service providers. The leaders are again companies like Aerodyne, Terra Drone, FEDS is strong in the Middle East and Cyberhawk is a company in the UK that also does a lot of work globally as well. Precision Hawk is noteworthy could say signed a global deal with Shell not just for drones, but they also have this unique asset management software platform that Shell is going to roll out for a lot of its asset management projects across the globe. So that was a big, big win for those guys. There's other companies, then you get a whole bunch of smaller drone service guys that are just handling a certain location and or a certain they specialize in a certain application. So that's a very fascinating market, but it's certainly growing. For example, if you look in American politics.
They were bought by Ondas in the the early part of 2021. Their Q1 results according to on Q1 financials was $50,000 for Q1 in 2021, which is maybe that company was bought for 74 1/2 million dollars and the multiples were and amazing but their most recently the most recent 10K was had shown that their quarterly results was above 20 million. So talk about a tremendous growth that they've seen and getting major oil and gas companies and chemical companies to incorporate and adopt their solutions. So there's tremendous growth opportunity as this company and FEDS I talked to in the Middle East. The guy told me that if when I talked to him earlier this year, he's if call me back in six months will be over five times and growth that we talked about earlier. So there's a lot of tremendous amount of growth and a lot of that is just because the pandemic.
I think increasingly more and more companies are coming out with, you know, more, more, more, I should say more sane, but more company, more commentating, a regulations that's allowing greater adoption. There is one company I forgot to mention that was from Hamburg, Germany, HHLA sky they were Basically a couple of guys that Siemens guys that basically had a parent company that does a lot of ports and containers operations. So that's their, that's their businesses and it'll port of Hamburg and other places like that. And so they designed their own drone solution for their own internal operational purposes and then it turned out to be one of the most impressive end to end drone solutions I've seen. They claim, and I believe in that they can, you know, operate remotely from a Control Center, you know, over 100 drones at one time. And they've been deemed critical infrastructure because they do a lot of the ports in Germany by the German Government. So they can obviously do BVLOS flights and things like that. So they they're coming out with a solution that I think it's going to really have a strong impact, not just in that market, but potentially another is like an oil and gas and wind turbine inspections and other things like that that I think that.
There's, you know, tremendous, tremendous need because companies Need to find ways to address the great crew change so they can't get enough people and they either lay them off because the oil prices went down oil well even when oil prices go back up, they having a hard time hiring people so they need to find technology.
Including drones are about to help fill that gap, and they're also using, as we know, digital technologies like artificial intelligence, machine learning, things of that nature to help fill that gap and sort of the technology becomes the advisor of the younger generation, tells them not necessarily truly closed loop operations, although the technology is getting that capability. But it's sort of acting as an advisor in the interim until we get to that point where greater autonomous operations is, it becomes a no more. That's in my opinion, that's gonna be probably 10 to 20 years minimum before we get to that point. But.
We'll see.
Jim Frazer2:24 PM
Well, Tim, thank you very much. We're we're nearing the end of our of our podcast today.
On earlier you stated that yourself and Dillon Fosa will be visiting the AUVSI exponential event in Orlando this week.
Tim Shea2:24 PM
Yep.
Jim Frazer2:24 PM
If anyone would like to meet you down there in Orlando or reach out to you if they're not in Orlando this week in future weeks.
How do they contact you?
Tim Shea2:24 PM
Well, they could reach me at my email and T she Shea at arcweb.com.
Or they could find me on Twitter at.
Step T Shah and ARC. That's my Twitter handle. And then I can also find me on LinkedIn and I.
Jim Frazer2:25 PM
You're.
Tim Shea2:25 PM
And that's so a pretty active in both and welcome any the chance to discuss questions, suggestions, anything. I was great to talk and learn new things.
Jim Frazer2:25 PM
But.
Tim, this has been very enlightening for me, and I'm sure I'm sure it will be, for for our listeners, thank you very much for being a guest today on the Smart City podcast. And I look forward to talking to you again after the AUVSI XPONENTIAL event for your perspectives on your weekly there this week. And of course, on future Smart city podcasts on additional subjects that you've studied. So thank you very much, Tim.
Tim Shea2:25 PM
Ohh I didn't forget, I forgot I forgot one thing I did forget. Shame on me for forgetting it. We have our annual 26th annual ARC Industry Forum going on in Orlando June 6 through the 9th that I have a a drone session on Thursday morning at 10:30 on June 9th that we're gonna have different speakers and panelists talking about.
Jim Frazer2:25 PM
Go ahead.
Tim Shea2:26 PM
Exactly this talking about how they've been, what that challenge they had previously, how they incorporated drones, what kind of challenges, if any, they had in in deploying those drones and more importantly, what kind of successes they've had and what kind of lessons learned or what kind of new applications have they encountered that been made? Perhaps someone didn't think of until they actually started using in their operations and said, ha, ha, perhaps they can do what be used here be used there. So we're very excited for that opportunity and we welcome the chance.
To join, we have a slot for one of the speaker left.
We have forward power and light and and another company that's gonna be speaking. So we're hoping to get a third one and we hope to see you in Orlando.
Jim Frazer2:26 PM
Yeah. And Tim, I'd be remiss if I didn't remind our audience that end users do qualify for a complimentary ticket to the Arc Forum in Orlando again June 6th to the 9th. There are four technology tracks over 2 1/2 days with a number of workshops in the day before. So it's a great opportunity to learn an awful lot not only about drones, but about digital transformation.
Tim Shea2:26 PM
Great point.
Jim Frazer2:27 PM
And smart cities and the energy transition.
Tim Shea2:27 PM
Sure.
Energy, energy, transition and sustainability.
Jim Frazer2:27 PM
Sustainability. So we welcome anyone who's would like to come to Orlando to join us at the A RC 26th annual forum June 6th to 9th.
Tim Shea2:27 PM
But when shameless last plug, one shameless last plug is I just read an article in the plane ride down to Orlando this early this morning was about how particularly drones are being used as a way of helping companies to lower their carbon footprint because instead of taking a very expensive and gas guzzling or jet fuel guzzling helicopter, perhaps jet, they fly a drone, which is typically battery operated. So there's no.
Carbon and minute. And so I think there's a, you know, it's a small role, but I think that even robots I think will be playing a role in helping in that regard. So it's interesting how companies.
Are seeing how that they cannot only help with, you know, basically keeping employees safe and mitigating things like that. But also you get the benefit of lower cost inspections, better quality inspections, more consistent data. And then on top of that, hey, you can help save the environment a little bit. So it's just an added bonus.
Jim Frazer2:28 PM
Tim, thank you again very much for being a guest. This has just been an insightful hour and we'll have you back again soon. And thank everyone for listening in and subscribing to the Smart City podcast.