This is the fifth in a six-part series we’re publishing on the future of robotics. Every day this week, we’re publishing a detailed outlook on a category within the robotics market including details on our thesis, outlook and market size for each category.

See previous notes in our Robotics Outlook 2025 series here: Intro, Industrial, Commercial, Domestic.

While robots have been deployed in military applications for years, the number of unmanned systems used by domestic and international defense agencies continues to grow. Thanks in large part to improvements in computer vision and robotic functionalities, unmanned systems are now capable of accomplishing tasks better than traditional manned systems. Today, military robots consist of unmanned systems that operate in the air, ground, and sea. While unmanned aerial vehicles are the most common form of robots used by militaries, unmanned ground systems and marine robots are playing a bigger role in tactical missions. Given that these unmanned systems improve situational awareness, reduce a soldier’s workload and minimize overall risk to military personnel, we believe robots of all kinds will play a growing role in military operations over the next 10 years.

• Unmanned Aerial Vehicles (UAV): Military UAVs take many forms, from drones small enough to hold in your hand to UAVs the size of manned fighter jets. Most of these drones can carry a wide variety of sensor payloads. Surveillance is primary UAV application in order to gather aerial intelligence. Military UAVs are typically more expansive than commercial drones, with pricing ranging from $50K – $1M+; however, due to technological advancements seen in commercial drones we anticipate pricing to decline steadily.
• Unmanned Ground Vehicles (UGV): Similar to UAVs, there are different classes of military UGVs varying in size and payload capacity. Some UGVs are small enough for a person to carry, while others are the size of a tank. UGV applications include intelligence, surveillance, and reconnaissance (ISR) functions, as well as cargo transport. Compared to other unmanned systems, UGVs are superior when direct action needs be taken on the ground. For example, an attached robotic arm could inspect or deactivate a potentially hazardous material. Pricing for UGVs vary based on size and range from $10K per unit to as much as $100K+ for larger models.
• Unmanned Marine Vehicle (UMV): UMVs include unmanned marine surface vehicles and underwater robots. While most UMVs in use today are cable of operating for multiple hours at a time, new UMVs can remain submerged for weeks at a time. UMVs are primarily used for marine surveillance, sweeping for mines, securing critical water passages, and serving as navel targets. UMVs are among the most expensive military robots in use today, with prices ranging from $200K for the low-end models to as high as $10M for high-end UMVs.

Military Robot Market to Grow to $2.8B By 2025

We believe a total of 12,336 military robots were delivered in 2016, which is up 8.8% from the prior year, and the total market value grew 6.7% y/y to $1.2B. We believe the vast majority of units were UAVs; we estimate that 10,330 military drones were sold in 2016. Over the next 10 years we anticipate UAVs will be a key focus within robotics for most militaries around the world. By 2025, we estimate that over 41K military drones will be delivered globally, representing a 16.2% CAGR and $2.1B market opportunity. We believe that the number of UGVs sold will increase from 1.9K in 2016 to over 5.9K in 2025, representing a $450M market opportunity. While we believe demand will be driven by all UGV classes, we anticipate faster growth among larger and more advanced systems.  While the category remains small from a unit standpoint today, we believe the UMV market will see healthy growth over the next 10-years and represent a lucrative market opportunity by 2025. We believe the industry shipped 131 UMVs in 2016 but expect 330 units will be delivered in 2025, representing a $260M market. UMV growth will be driven by further applications and use case development. In the exhibit below, we highlight our domestic robot forecast through 2025.

Final Thoughts

We anticipate the military robot market, which includes UAVs, UGVs and UMVS, to grow from $1.2B in 2016 to over $2.8B by 2025, representing a 9.4% 10-year CAGR. While it is not the fastest growing robotics market, we see unmanned systems playing a growing role within domestic and international militaries over the next 10 years. While we see unmanned aerial vehicles of all sizes garnering the highest percentage of total spend, we believe UGVs and UMVs will see healthy adoption. Note that we do not view UAVs, UGVs and UMVs as competitive to one another; rather, they are complementary military strategies. Lower robot costs and improvements in robot functionalities driven by innovation in computer vision and AI will be the primary catalyst to further adoption of military robots.

Next: Social and Entertainment Robots

In our final piece, we’ll discuss the emergence of robots as personal companions and toys.

Austin Bohlig contributed to this note.