Season 4, Post 44: Hopefully we have lift-off
On a recent sunny Autumn morning your author ventured ten miles south east of central London to Beckenham Park in order to deepen his knowledge of future trends. There, he had an opportunity to fly a drone. Drones have historically been associated either with military warfare or keen hobbyists (like your author’s fellow Heptagonian, to whom the machine belonged). However, as we discussed in more detail in our most recent theme piece, the number of practical use cases for commercial drone deployment is growing significantly.
Our drone was certainly impressive in its capabilities. Not only was it easy to operate (via a handheld remote controller), but the quality of the imagery it was capturing (viewable in real-time via the headset visible in the photo) was compelling. The drone is able to reach heights of up to three miles and can operate for around 30 minutes on a single battery charge. While the primary motivation for owning this drone is to allow for stunning photography/ video footage to be taken from novel angles, a growing consumer familiarity with such devices may make their broader future rollout in other scenarios more seamless.
Consumers certainly have no shortage of choices. Type ‘drone’ into Amazon and around 500 different options are highlighted, ranging in price from $50 to $1500 and in payload from 250g to 20kg. Their quality and functionality continue to improve each year. Similar to new iterations of the iPhone, the latest drone models contain features such as 4K definition and dynamic angle filming. More and more of your colleague’s friends are apparently buying them. Your author has yet to part with his cash though.
It is, however, one thing flying a drone in a suburban London park on a quiet morning to having drones filling the streets with pizza deliveries and e-commerce packages. Many such trials are underway in cities across the world by the likes of Amazon, DHL, Domino’s, Tesco, Walmart and more, as discussed in our theme piece. When the question was put to your author’s colleague whether he was in favour of getting his goods by drone, he highlighted concerns over the ability of drones to deliver accurately – what if there were congestion or potential mid-air collision resulting in goods being either delayed or damaged? These are certainly valid issues, which will need addressing. Others include noise-levels and cyber-compromise. Regardless, investment continues apace. Beyond miliary deployment, by decade-end the industry could be worth $100bn.
10 November 2022
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
Photos taken by the author (and his colleague).
Alex Gunz, Fund Manager
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