Recently Mobilicom have announced the first sale of SkyHopper PRO to Samsung. This is for use in drones that perform security and inspection operations for its factories. Mobilicom received the Japanese high-power transmission certification for its SkyHopper data links, making SkyHopper the first certified high power, long range, highly secured data link in Japan. This certification will enable the business to bid for a greater range of contracts in Japan.
A significant value driver for Mobilicom is the growth of the drone industry. PWC estimates the drone industry will reach $127bn by 2021. Goldman Sachs estimated the market will be worth $100bn. These estimates of the total market value support the argument that the industry is only in the early stages of development and is poised to enter a rapid growth phase over the next few years. Mobilicom is in an ideal position to take advantage of the market opportunities presented and grow rapidly in line with the overall industry.
Mobilicom has received purchase orders from NTT exceeding $200,000 with additional orders expected to be placed this year. The purchase orders will see kits from Mobilicom, each including approximately ten of its MCU products, serving the Japanese Self Defence Forces (SDF) for disaster relief initiatives across the country. The SDF is comprised of ground, naval and air divisions, with each division having a presence across each of the cities and prefectures in Japan. This provides Mobilicom with a very large potential for sales to NTT, given the opportunity to deploy a kit within each SDF unit, across its various divisions and geographies NTT is the fifth largest telco company in the world and is the third-largest publicly traded company in Japan. NTT has a market cap of 9,537B JPY ($125B AUD) and revenue of 11,900B JPY ($156B AUD), about four times the revenue of Telstra, and can provide Mobilicom with significant scope and growth opportunities moving forward.
Airbus has chosen Mobilicom’s SkyHopper solution to be integrated into its drone innovation platform. This significantly broadens Mobilicom’s worldwide presence and validates the solution. Airbus is a global leader in aerospace and develops cutting-edge technologies to shape the future of flight. It has over 67 Billion Euro in revenue and over 129,000 employees worldwide. Read the announcement.
Mobilicom has entered into a key strategic partnership with leading drone manufacturer Yuneec. Yuneec is the second-largest drone manufacturer in the world, selling more than one million products per year, and is partially owned by Intel. Under the strategic partnership, Yuneec will release two drone platforms for commercial and federal markets based on Mobilicom’s product. This will be an excellent opportunity for Mobilicom to work with a giant in the drone industry and leverage its worldwide sales channels.
The US has placed a ban on certain 3rd party drone solutions due to potential back door cyber risks. In response to this, Mobilicom has released a breakthrough Commercial Drone Upgrade Solution that serves as an after-market add on for drones already sold in the market. The Israel Ministry of Defence has completed a $572,000 purchase order for this technology, and Mobilicom expects revenue from this product to exceed $1 million in 2019. The Israel Navy has also recently completed a $280,000 purchase order for Mobilicom’s drone upgrade solution. The Israeli Ministry of Defence has now generated more than $850,000 in revenue for Mobilicom and is well on track to achieve its target of $1m by the end of 2019. Israel is at the forefront of drone technology and Mobilicom’s partnership with the Ministry of Defence is likely to prove extremely beneficial in the future. The Israel Ministry of Defence and Israel Innovation Authority approved a two-year A$1.8m R&D program for Mobilicom to develop cybersecurity using AI for drones and robotics platforms. Read the announcement.
The rapid growth and development of drone technology has brought the industry into the public spotlight, with an ever-increasing number of drones being used for both commercial and personal purposes. A flying drone is an aircraft without a human pilot aboard and this earns them their alternate name of unmanned aerial vehicles (UAV). Drones are robots typically remotely controlled by a pilot or through a fully autonomous system. Although drones were originally designed to serve military purposes, they are quickly evolving to become powerful business tools and are being deployed in numerous ways, ranging from firefighting to mining.
Boston Consulting Group estimates that by 2050, the industrial drone fleet in Europe and the US will comprise more than 1 million units and generate $50 billion per year in product and service revenues.
Drone technology is set to transform numerous industries with the most significant impacts to be felt in infrastructure, transport, and agriculture. These sectors are particularly well suited to drone-based solutions as they require both mobility and high-quality data.
Despite the clear business benefits of drone technology, there are security issues that need to be addressed. From using Wi-Fi-based data links to drones without encryption and other security mechanisms to backdoor cyber risks, there are many technological elements that can make a drone susceptible to hacking. This causes breaches of sensitive data and video, hi-jacking of the drone, and also crashing.
By the year 2020, Price Waterhouse Cooper (PWC) expects the total addressable value of drone-powered solutions in the industry to exceed $127b. Although personal drones contribute 94% of unit sales, they only comprise 40% of market revenue. On the other hand, commercial drones represent 6% of unit sales and make up 60% of revenue due to higher price tags. With the increasing commercial adoption of drone technology, this definitely appears to present the fastest and most exciting growth opportunities for the drone industry. Due to the increasing commercial need for high-quality data, value is likely to derive from services that operate and manage drone data, with value-add services expected to represent $23b of the market.
Drone technology is able to perform hazardous work and gather various data sets in a precise and cost-effective manner. This will provide significant benefits to industries such as energy and oil & gas, where companies operate extensive networks of complex infrastructure distributed over large areas.
Drone technology can prove extremely innovative when dealing with inspection work over large infrastructure projects. Most inspection work is currently performed manually and is a slow and costly process. Drones are able to locate defects both faster and more cheaply with higher quality image processing. for companies to analyse large quantities of data much more accurately. They also offer 3D modelling solutions, for improving the speed and quality of the design process. For example, a typical wind turbine inspection currently costs around $1,500 per tower, with the use of a drone this can be cut by 50%.
Information from drones is processed automatically and stakeholders have swift access to complex data to make investment decisions.
Drones are expected to become an integral part of the transport industry with uses ranging from e-commerce package delivery, to the transport of medicine. According to PWC estimates, the addressable value of drone solutions in the transport industry will be $13b in the near future.
Drones enable fast delivery of consumer goods which has the potential for more efficient delivery processes, reduced costs, increased profit margins and a decrease in road traffic. Amazon has announced its plan for 30-minute delivery utilizing drone technology, under a project called Amazon Prime Air. These autonomous drones are capable of flying at heights of 100m while carrying packages of 2kg at 80kmh. Sending a 2kg package within a 10 km radius in the US by ground transport costs Amazon $2 to $8, compared with just 10 cents using a drone. Tech company, Wing (run by Google’s parent company Alphabet), has been given permission to launch a household drone delivery service in Canberra’s north. Deliveries ranging from coffee to medical supplies will first be offered to 100 homes before expanding to multiple suburbs in the surrounding area. Wing estimates that there could be 11,000 drone deliveries each day in the ACT. With further advances in technology, commercial delivery services are expected to benefit greatly from the implementation of drones.
Another transport application for drones is for medical logistics. This will allow the rapid delivery of medical supplies to remote rural areas. An American based start-up, Zipline, has developed technology that provides drone-based medical logistics. An average delivery takes 30 minutes instead of a potential 2.5-hour car trip from a hospital.
The agricultural industry is likely to face significant challenges due to the rising global population which is expected to reach 9 billion by 2050. This means that agriculture will need to revolutionise its operations in order to increase its efficiency, whilst also facilitating environmental sustainability. There are significant opportunities for drone technology to help enable this.
The most significant advantage of drone technology will be an increase in the efficiency of monitoring crops. Drones are able to provide real-time crop monitoring for large areas of farmland, which is considerably cheaper and more accurate than satellite imaging.
Furthermore, drones are able to produce 3D soil analysis models that can be used to plan seed planting patterns. Systems have been developed that assist in drone planting which can decrease planting costs by up to 85%.
The increased global adoption of drone technology coupled with lower prices, places drones at risk of exploitation for criminal purposes. Recent events have placed greater scrutiny on the need for constant monitoring and regulation of drones.
In December 2018, Gatwick Airport was shut down for two days due to numerous sightings of drones over the airfield. This caused significant disruption to not only Gatwick Airport but also other connecting airports. Current counter-drone techniques revolve around frequency jammers, this however presents major difficulties near airports due to the numerous sources of potential radio interference. A drone enthusiast and his partner were arrested but released without charge, but this raise concerns over potential acts of terrorism using drone technology. Following the Gatwick incident, the terrorist group Islamic State launched propaganda campaigns threatening US and EU cities with drone attacks.
There have also been terrorist incidents linked to drone usage, such as the 2018 assassination attempt of Venezuelan President, Nicolas Maduro, and drone attacks at Saudi oil pumping stations in May 2019.
In addition to terrorism, there are concerns over the security of data collected by drones. Almost all drones in production do not physically separate the data storage and management of autopilot. Whenever the firmware that flies the drone updates, it is connected to the internet where it downloads the update. This connection could be a point of vulnerability that may lead to security breaches with the recorded data. With drones being used more and more in highly sensitive environments, this poses a significant problem. There have been allegations made that DJI, who manufacture almost 80% of drones worldwide, have been sending sensitive flight data back to the Chinese government. The US Department of Homeland Security has put out an industry alert to be cautious when purchasing this technology. It is important to note that these are just allegations and the security of DJI technology has been independently verified by the US government.
It is these opportunities and vulnerabilities in the commercial drone industry that led Mobilicom to leverage its technologies from its core Mobilicom business, into its second business entity SkyHopper, which aims to provide the most secure and effective solutions for commercial drone operations.