Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - QLEX Creo (QLEX Creo – Bringing reach to the drone market.)

Teaser

\"The context: In the near future, clients in all areas of the economy will begin to see the impact of drones on their operational processes – from the way they receive parcels to how blood supplies are being delivered to remote areas. Businesses and labour that are expected...

Summary

\"The context: In the near future, clients in all areas of the economy will begin to see the impact of drones on their operational processes – from the way they receive parcels to how blood supplies are being delivered to remote areas. Businesses and labour that are expected to be replaced by drones in the very near future within today’s transportation industry are being valued at EUR 12.1 bn. Within 20 years, the European drone sector is expected to directly employ more than 100,000 people and to have an economic impact exceeding EUR 10 bn per year.

The Problem: Even though more and more market applications are emerging, the barriers of this young technology are evident: „Our biggest concern regarding the professional application of drones is the limited reach. The battery technology has to improve massively. But this will take a while.\"\" (Jens Rosenow, UAV DACH e.V. – German association representing the drone industry). This statement can be easily quantified by observing current solutions: Depending on their construction type, today’s industry class drones cannot reach distances longer than 160 km and fly longer than 45–120 min.

● Multi-rotor drones are slow and highly inefficient for long flights: they can only fly for 30–50 min and cover distances of max. 20 km.
● Winged drones that can takeoff and land vertically (VTOL) have a maximum flight time of 120 min and cannot cover more than 160 km.
● Winged drones can achieve higher flight times, but cannot takeoff and land vertically. A runway/ramp/parachute or safety net is required – resulting in less flexibility, less ease of use and damages during operation.\"

Work performed

1.1 Assessment of commercial feasibility

Analysis of the Market potential:
QLEX is entering a market analysts widely describe as “ballooning”. When it comes to the production volume of drones, Gartner predicts that 2.6 m commercial grade drones will be shipped annually in 2025 (2015: 80,000; CAGR: 47%). The global market revenue for (prosumer and commercial usage drones is expected to reach EUR 5.6 bn by the end of 2020 (CAGR: 32%). Technavio’s analysts are even more bullish and predict the commercial purpose drone market to grow steadily at a CAGR of 57% between 2016 and 2020. While production unit volume is much higher in personal drone market (nearly 3 million drones will be manufactured in 2017), the commercial drone market is being characterized by a significantly higher average selling price and therefore total revenue:

Personal drones: Ø EUR 77
Commercial drones: Ø EUR 22,300

Most relevant market segment for initial introduction:
Our target market is clearly within use-cases where reach and flight duration matters most. Our initial proposed target customers have been companies whose main focus is the efficient transport of goods of all kind. One important finding of this project is the pivot regarding our initial target market. Our analysis during interviews with several potential customers changed our initial target market. Entering the transportation segment will be a key long term goal for our company. But we expect stronger short- and midterm traction within a different segment:
The field of infrastructure inspection – especially for pipelines and electricity power-lines is a field with lower market entry barriers (one Exception we will target earlier: transportation of medicines, vaccines and blood).

Pipeline and powerline inspection:
Pipeline and high voltage power lines need inspection on a very regularly basis. Most pipelines are inspected on a 14 days cycle.

Disaster control:
There is no doubt in drone’s efficiency in case of supporting emergency management.
Floods, earthquakes and forest fires demand a rapid mapping and continuous monitoring of the affected area.

Police & security:
Border control demands extremely calm drones for the surveillance. National police is highly interested in drones to monitor demonstrations.

Coast guard and maritime surveillance: Coast guards praised as the “transformational technology” as “an incredibly important first step in realizing the Coast Guard’s vision of fleetwide” drones. Several coast guard tasks can be done more efficient and by the usage of drones.

Medical supply:
Medicines, vaccines and blood can be easily delivered to remote areas.

Competitive landscape:
Even one year after the publication of our first flights there still is no competitor that comes close to the performance of the QLEX Creo. The level of competition in the long-distance segment (250 km+) is still quite low which proves that we have developed drone that exceeds the technological standards by a large margin.

Commercial proof-of-concept:
We were able to proof the commercial feasibility of the QLEX Creo by selling drones and by closing deals for providing services based on our drones.

1. First sold QLEX Creo: We successfully launched our industrial beta program and
delivered our first drones to paying beta-customers.

2. First service contracts: We are currently working on a beta program for providing services for different pipeline and high voltage power line-inspection projects.

Pricing and portfolio strategy:
Earlier than expected we expanded our QLEX Creo product portfolio.

Record-breaking proof of concept:
In the application we proposed to carry out a fully autonomous delivery from German mainland to island Helgoland and return in one non-stop flight. This would not only habe been the longest e-VTOL-flight but also the longest flight beyond the visual lines of sight (BVLoS) ever in Germany according to the German Aviation Association.

Exploitation

Final results

Conclusion of the action

Conducting the feasibility study was a great opportunity to test and refine our drones, and even to sell our first products. The outcomes of the feasibility study were utmost promising. We achieved a perfect product-solution fit within the inspection market and the market for light supplies like blood and medicines. We strongly believe these markets will be disrupted by drones because they perform these tasks more efficient than helicopters or planes in many ways. We are confident to be the major market force in this field.

We reached TRL 8 earlier than expected and also achieved progress for even better reach and flight durations.
Even though competition seems to increase in the lower range segment, in the long-range segment there is no competitor in sight that comes even close to matching our performance.
From a commercial standpoint we established a sustainable base of beta customers by both selling beta versions of the QLEX Creo and also providing lucrative services for inspecting infrastructure projects like high-voltage power line inspections.

Website & more info

More info: http://www.qlex.one.