From radar to satellite navigation, the jet engine to digital photography, and the internet to cellular phone networks.
What often starts life as a military invention goes on to transform the world.
The same has happened with drone technology.
Created in the 1980s for armed forces, by the 2000s these unmanned aerial vehicles were smaller, lighter and cheaper to produce.
The retail market took off with a bang in the early 2010s, followed shortly after by the commercial drone sector.
There are signs that growth is accelerating, with Markets & Markets predicting the market could be worth $63.6bn by 2025.
With the right company, this could be a truly incredible investment opportunity.
Just at the point increasing numbers of commercial drones are taking to the skies, Chinese dominance of the industry has hit the skids.
Deep-rooted national security concerns about data safety are creating a regulatory environment, in which Chinese manufacturers are increasingly being left out in the cold.
This leaves the market wide open for U.S. manufacturers and Draganfly Inc. (CSE:DFLY|OTCQB:DFLYF|FSE: 3U8), which has carved itself out a lucrative niche.
How the Global Trade War has created a $600 million opening for Draganfly (CSE:DFLY|OTCQB:DFLYF|FSE: 3U8)
Over the years, Draganfly’s (CSE:DFLY|OTCQB:DFLYF|FSE: 3U8) model has evolved. As the oldest commercial drone manufacturer in the world, the company sees the opportunity ahead in being a data solutions business that makes drones.
Leveraging its core expertise in drone technology, Draganfly has put together a unique, innovative offering that few can match.
Challengers have tried, but have been unable to close the gap.
Silicon Valley drone startups came and went. Years behind in R&D, they blew hundreds of millions trying to emulate what Draganfly has.
As CEO Cameron Chell puts it:
“Draganfly has the experience, patents, tools, products and customer relationships that would cost any new entrant a huge upfront investment to develop. We have these because we were so early in the space and have established market-leading technology.”
From foldable wings and GPS-driven and machine driven auto follow kit, to removable propellers Draganfly has a formidable and growing Intellectual Property (IP) portfolio, which the company believes is on the cusp of delivering outsize returns.
The opportunity has opened up thanks to the Global Trade War.
DJI is the Chinese darling of the drone industry. This $15bn oriental unicorn is the world’s largest consumer drone company, with an estimated 70% market share.
However, despite being the sector’s 800lb gorilla, DJI faces a major regulatory roadblock.
It all centres on mounting U.S. concerns about China’s role in ‘Forced Technology Transfer’ (FTT).
If you aren’t aware of it, FTT has been happening for years.
It’s not conjecture, nor prejudice.
It is Chinese ACTUAL POLICY enshrined in law, where China demands that foreign companies “share” technology in order to gain access to the Mainland market.
This thorny issue has been one of the main catalysts behind the trade war between the world’s two major superpowers.
Oxford University’s Law School, second only to Harvard, explains how companies have been forced to hand over “excessive amounts of trade secrets” to Chinese regulators to get pharmaceutical drugs developed.
Other firms have been forced to form joint ventures with Chinese companies to get business licenses granted or access to state funding.
While some reform is working its way through Communist Party-led courts, the practice is widespread.
However, FTT will likely be DJI’s downfall in the United States.
Most recently, US lawmakers on the House Judiciary Committee stepped in to put an emergency halt on DJI’s attempted expansion into the US public safety market.
Bloomberg reported on May 14 how the lawmakers expressed extreme concern that DJI ‘giving away’ drones to more than 40 local governments in 22 states could mean the devices would be used to spy on US critical infrastructure and the population at large.
The Department of the Interior has already grounded its fleet of DJI drones over national security concerns.
Clearly, with regulatory opposition this strong, DJI cannot expand in the United States.
It could even struggle to maintain its current market share.
For companies like Draganfly (CSE:DFLY|OTCQB:DFLYF|FSE: 3U8) this presents an incredible opportunity. Chell goes on to explain:
“Chinese drone products in the United States at a government level represent up to an estimated $600 million of business per year. This is spread across drones, data and services. With changes to the legal environment, this has created a vacuum and there are only a few companies to help fill that demand.
This $600m vacuum, which we saw potentially coming, is now here. There’s an opportunity for North American manufacturers to fill it and we are well positioned to become a leader. “
So that’s the competition.
But enough about them and how they will fail.
Just how big is the market and how might Draganfly profit?
How to play the drone tech boom – Draganfly (CSE:DFLY|OTCQB:DFLYF|FSE: 3U8)
The growth of the drone market has taken many by surprise over recent years.
Just in 2018, the Wall Street Journal reported that the Federal Aviation Authority predicted commercial drone usage would QUADRUPLE to see 452,000 UAVs in the sky by 2022.
There would be so many certificated remote drone pilots that they would outnumber private and commercial pilots combined!
Sounds like a lot, huh?
But even that ambitious forecast drastically underestimated the market’s potential.
By early 2020 that number of 452,000 drones had already been surpassed!
This led to the FAA doubling its prediction to 835,000 active drones by 2023, “given the accelerated registration over the last year”.
With all the signs pointing towards this trend continuing, Draganfly (CSE:DFLY|OTCQB:DFLYF|FSE: 3U8) is perfectly positioned to take full advantage.
The company has five diversified revenue streams that have seen sales growth shoot up 235% in the last 12 months.
The first revenue stream is through contract engineering. Military contracts provide stable, multi-year revenue and Draganfly has large deals already in place with the likes of tactical unmanned aircraft defence contractor Aerovironment.
The second line of business is as an original equipment manufacturer. Remember what we said about DJI? Governments don’t want ‘Made In China’ any more. Draganfly is breaking new ground using its equipment and expertise for exciting new applications to help the world reopen after Covid-19.
The third is Aerial Services like LiDAR, or light detection and ranging. This remote sensing laser tech added to a drone can build 3D maps in the blink of an eye. It has massive applications for the infrastructure and mining industries. It’s already worth millions a year to Draganfly and is growing so fast it’s expected to double in short order
The fourth is in managed services. It could be a huge agri tech company seeking to improve its crop yield or an insurance giant in need of surveying the scene of a natural disaster to calculate pay-outs. Need a drone division? Draganfly will custom build a fleet for you and manage all the mission-critical data feeds and analysis.
The fifth is Data Acquisition & Analytics. Draganfly builds tailored data management systems, with analytic capabilities. This provides clients with valuable strategic and operational insights into mission-critical aspects of their organizations, in a secure software architecture.
A recent example of this was when Draganfly inserted its health measurement technology into a product called ‘Smart Set Solutions’, which Hollywood is now adopting.
This technology provides health measurement and pre-screening of infectious disease symptoms common in Covid-19. The Draganfly system provides critical daily health data of the crews on production sets. The data provides best practice integration to help ensure the infection curve on a production set stays flat.
Another example is Draganfly’s Minning solution, where the company flies magnetometer missions over resource exploration targets.
Not only will this product deliver the data, but it will also apply an AI engine (announced in a recent partnership press release) to provide live drill target comparisons.
With five clearly defined and growing revenue streams and the $600 million supply gap opened up U.S. regulators, the future looks very bright for Draganfly Inc. (CSE:DFLY|OTCQB:DFLYF|FSE: 3U8).
IMPORTANT NOTICE AND DISCLAIMER PAID ADVERTISEMENT.
Paid Advertisement
This communication is a paid advertisement. ValueTheMarkets is a trading name of Digitonic Ltd, and its owners, directors, officers, employees, affiliates, agents and assigns (collectively the “Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Draganfly Inc to conduct investor awareness advertising and marketing and has paid the Publisher the equivalent of ninety six thousand USD to produce and disseminate this and other similar articles and certain related banner advertisements. This compensation should be viewed as a major conflict with the Publisher’s ability to provide unbiased information or opinion.
Changes in Share Trading and Price
Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to adversely affect share prices. Frequently companies profiled in our articles experience a large increase in share trading volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in share trading volume and share price may likely occur.
No Offer to Sell or Buy Securities
This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security.
Information
Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position.
This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher does not guarantee the accuracy or completeness of the information. Further, the information in this communication is not updated after publication and may become inaccurate or outdated. No reliance should be placed on the price or statistics information and no responsibility or liability is accepted for any error or inaccuracy.
No Financial Advice
The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser or a financial adviser. The Publisher has no access to non-public information about publicly traded companies. The information provided is general and impersonal, and is not tailored to any particular individual’s financial situation or investment objective(s) and this communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor or a personal recommendation to deal or invest in any particular company or product. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results.
Forward Looking Statements
This communication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. Statements in this communication that look forward in time, which include everything other than historical information, are based on assumptions and estimates by our content providers and involve risks and uncertainties that may affect the profiled company’s actual results of operations. These statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results and performance to differ materially from any future results or performance expressed or implied in the forward-looking statements. These risks, uncertainties and other factors include, among others: the success of the profiled company’s operations; the size and growth of the market for the company’s products and services; the company’s ability to fund its capital requirements in the near term and long term; pricing pressures; changes in business strategy, practices or customer relationships; general worldwide economic and business conditions; currency exchange and interest rate fluctuations; government, statutory, regulatory or administrative initiatives affecting the company’s business.
Indemnification/Release of Liability
By reading this communication, you acknowledge that you have read and understand this disclaimer in full, and agree and accept that the Publisher provides no warranty in respect of the communication or the profiled company and accepts no liability whatsoever. You acknowledge and accept this disclaimer and that, to the greatest extent permitted under applicable law, you release and hold harmless the Publisher from any and all liability, damages, injury and adverse consequences arising from your use of this communication. You further agree that you are solely responsible for any financial outcome related to or arising from your investment decisions.
Terms of Use and Disclaimer
By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here https://www.valuethemarkets.com/terms-conditions/ and acknowledge that you have reviewed the Disclaimer found here: https://www.valuethemarkets.com/disclaimer/ . If you do not agree to the Terms of Use, please contact ValueTheMarkets.com to discontinue receiving future communications.
Intellectual Property
All trademarks used in this communication are the property of their respective trademark holders. Other than Valuethemarkets.com, the Publisher is not affiliated, connected, or associated with, and the communication is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks other than Valuethemarkets.com.
Ben Turney
Valuethemarkets.com and Digitonic Ltd and our affiliates are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.
This article does not provide any financial advice and is not a recommendation to deal in any securities or product. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.
Ben Turney does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above piece. Ben Turney has been paid to produce this piece by the company or companies mentioned above. Digitonic Ltd, the owner of ValueTheMarkets.com, has been paid for the production this piece by the company or companies mentioned above.
