Intel and Drones: Both Could See Tremendous Growth
Drone space is seeing a lot of developments
In the prior part of the series, we looked at technology companies such as Intel (INTC), Amazon (AMZN), and Google (GOOG), who are vying for drone space for a multitude of reasons. They want drones to enhance their operations as they explore rapid growth territory.
In July 2015, Amazon provided details of its plan for a multi-tiered drone superhighway in the sky. Amazon’s plan includes drones flying above 200 feet with the ability to communicate and ideally sense and avoid other aircraft.
Qualcomm (QCOM) is another chip company that aims to supply its products with drones. At CES (Consumer Electronics Show) 2015, Qualcomm introduced a flying and rolling robot powered by a Qualcomm Snapdragon processor through the Snapdragon Cargo. It has an integrated flight controller. Snapdragon Cargo boasts a multi-functional computing platform that combines multi-core processing, sensor integration, wireless communications, positioning, and real-time input-output for multiple robotics applications.
According to CB Insights and as you can see in the above chart, Airware has emerged as the best-funded drone startup in 2014. It raised approximately $40 million in venture capital (or VC) companies, namely Andreessen Horowitz; Kleiner, Perkins, Caufield & Byers; and First Round Capital. The research firm data further disclosed that VC funding in drone companies was >$108 million across 29 deals in 2014.
Commercial drones are expected to grow at a double-digit rate in the future
VCs’ and technology players’ investments in the drone space are on the rise. They hope UAVs (unmanned aerial vehicles) will prove beneficial not only for consumers but for industrial customers as well. As mentioned earlier in the series, UAVs are aircraft that don’t have a human pilot onboard.
UAVs find usage primarily in the military space but are also used in search-and-rescue operations, traffic monitoring, weather monitoring, surveillance, and firefighting. According to Business Insider Intelligence estimates, commercial or civilian drone markets are expected to grow at a compound annual growth rate (or CAGR) of 19% from 2015–2020. It expects military space to grow at a CAGR of only 5%.
You can consider investing in the Technology Select Sector SPDR ETF (XLK) to gain exposure to Intel. Intel makes up about 3.55 % of XLK.
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