Satnews Daily
September 18th, 2016

Euroconsult Sees Continuing Expansion For EO Manufacturing & Data Markets

According to the 9th edition of Euroconsult's report, Satellite-Based Earth Observation, Market Prospects to 2025, due to be published in the coming weeks, 163 satellites (>50kg) were launched for civil and commercial Earth Observation (excluding meteorology) over 2006-2015.

These were launched for entities in 35 countries and generated $18.4 billion in manufacturing market revenues. Most of these satellites were launched by government operators to support policy objectives spanning climate change, sustainable development and industrial support. In addition, EO remains the primary application for emerging space programs; growing funding into these programs is a key driver for overall investment growth. In 2015, civil government investment topped $10 billion for the first time.

The commercial data market totaled $1.7 billion in 2015 and is anticipated to total $3 billion in 2025. Ongoing economic unrest in key Latin America countries and Russia, as well as lower oil and gas prices, are having an impact, as does anticipated price reductions for $/km2 of EO data. Nevertheless, the industry continues to develop positively. In the short term, growth is expected to continue to be driven by defense, with ongoing regional unrest and the limited ability of countries to operate capable image intelligence systems being the main driving factors. Further applications such as in the maritime, infrastructure and resources monitoring sectors are expected to support growth in the longer term.

The value-added services market reached $3.2 billion in 2015, and is growing at a faster rate than the data market alone (11 percent five year CAGR). Key markets for value-adding services do not mirror those for commercial data sales. Defense, while representing 61 percent of the commercial data market, represents only 15 percent of the VAS market; conversely, infrastructure projects (such as cartography, cadaster, etc.) are only 10 percent of the commercial data market, but 33 percent of the value-added market. The reasoning for this is relatively straightforward; defense end-users purchase data with much value-added analytics performed in-house. On the other hand, lower-cost, coarser resolution and geolocation accuracy data can be leveraged with value-adding to form higher value products and services. This approach is expected in emerging location-based applications - the focus of upcoming satellite constellations. While the data may be lower-cost, it will be able to build applications based on high frequency change detection with the focus on the product or service delivery over purely data sales.

According to Adam Keith, the Managing Director of Euroconsult Canada and editor of the report, the EO industry is going through a significant supply increase. Over the next decade, 419 satellites are expected to be launched generating $35.5 billion in manufacturing revenues. Keith added, "Significant growth in the the number of commercial satellites launched in constellation is expected. When the number of satellites <50kg (such as the Planet and Spire constellations) are added, the number of supply solutions expands even further. As supply will increase faster than the demand for commercial data and services, some price pressure is expected to result. As well, operators will need to better differentiate themselves in the marketplace as to the capabilities of their respective systems."