Market Insight

Verizon deepens drone capability with Skyward acquisition

February 26, 2017

Julian Watson Julian Watson Principal Analyst, IoT, IHS Markit
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  • Verizon has acquired the privately-held Skyward, which provides a drone operations management platform for organisations across a range of verticals, such as agriculture, construction, media and real estate among others.
  • Skyward’s positions itself as an end-to-end drone operations platform provider. It’s platform supports a range of activities such as mission planning and mapping, regulatory compliance support, drone registration, provision of information on restricted airspace, piloting credentialing and data analytics.
  • The acquisition deepens Verizon’s capabilities in the drone management space, following the launch of its Airborne LTE Operations (ALO) initiative in October 2016. The deal is the latest in a spate of IoT acquisitions by Verizon after those of LQD WiFi (November 2016, smart cities), Sensity Systems (September 2016, smart cities), Fleetmatics (August 2016, fleet and mobile workforce management), Telogis (June 2016, connected vehicle and mobile enterprise management).

Our analysis

Verizon had already invested in Skyward (and PrecisionHawk, a provider of aerial data and safety platforms for drones) through its Verizon Ventures unit. The outright acquisition of Skyward gives Verizon both deeper capabilities in the drone management space and scale across multiple verticals and geographies. The platform is used in some 40 countries.

Verizon has been researching and testing the application of cellular connectivity within unmanned aerial vehicles (UAVs) and unmanned aerial systems (UAS) for several years. Last year, in conjunction with American Aerospace Technologies, it completed a technical trial using a 17-foot wingspan unmanned aircraft system, which used aerial inspection techniques to assess the condition of pipelines in rural Virginia. Following the completion of the trial, which used the operator’s 700MHz LTE network, Verizon developed device and service requirements and certifies third-party devices that can be embedded or retrofitted into UAVs. Verizon is adding the new drone management capabilities to its Thingspace IoT platform and is planning to test beyond visual line of sight (BVLOS) in-flight connectivity once US federal regulations permit.

The commercial usage of drones is at a nascent stage. Recent IHS research estimated that there were less than 200,000 professional service drones in operation globally by the end of 2015.  But in the longer term there’s potential for wider-scale deployment across a range of industries, such as commercial transport, agriculture, construction, manufacturing and public safety among many others. The usage of drones can potentially save time, cost and manages a range of risks, such as the safety of emergency service personnel and of the public. The requirement for high levels of availability and reliability as well as low latency makes drones a potential use case for future 5G networks.

5G will not appear in a standardised format for several years to come. In the meantime, Verizon and other mobile operators are exploring drone use cases with their existing mobile networks. In September 2016, Qualcomm announced that it had teamed up with Verizon’s rival AT&T to test drones on its own LTE network. More recently, leading UK mobile operator EE has developed proprietary air mast technology, combining a balloon and a drone, with the objective of providing LTE coverage to underserved rural areas. Australia’s Telstra is testing the use of drones to remotely monitor the status of base stations and rapidly restore service during the storm season in Australia.

Drones is one of the many IoT-related areas being considered by Verizon and other operators to either drive new revenues or introduce efficiencies into their existing businesses. In 2016, Verizon generated around $1 billion in revenue from its IoT business (0.8% of its $125.98 billion in annual revenue) up around 44% from $690 million in 2015. Some of this growth was fuelled by acquisitions in the smart cities and telematics space. It is also strengthening the scale and reach of its ThingSpace IoT platform. Recent and upcoming initiatives include the pre-integration of the ThingSpace client into Qualcomm’s MDM9206 modem, which supports the Quectel and Telit LTE Cat-M1 modules, and the launch of a development kit for businesses seeking to deploy Cat-M1 devices. Verizon is also partnering with Cypress Semiconductor: its ThingSpace software development kit is being made available to developers via the Cypress Wireless Internet Connectivity for Embedded Devices (WICED) Studio 4 development platform.

 

Geography
USA
Organization
Verizon
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