Low-cost constellations to foster development of new service areas
Paris, Washington D.C., Montreal, Yokohama, October 19, 2018 – According to the 11th edition of Euroconsult’s report, Satellite-Based Earth Observation: Market Prospects to 2027, the commercial Earth observation (EO) data market could reach $2.4 billion in 2027, driven by a mixture of defense and new commercial markets and supported by the arrival of new constellation operators. The EO market for value-added services (VAS) should reach over $5.7 billion by 2027; potential new service areas with entrants focusing on developing constellations to support high-frequency change detection could even see the VAS market reaching $9 billion in our upside scenarios.
For this new edition, we have revisited our market estimates and forecast methodologies in this fast-changing environment, deepening our bottom-up analysis.
Euroconsult has identified approximately 15 companies that have announced intentions to develop low-cost constellations based on smallsat technologies. This has been aided by the advancement in several areas such as miniaturization of components, enabling the development of more capable satellites at a lower mass. We anticipate the launch of nearly 1,500 smallsats (most of them below 50kg) to serve EO applications and see the years 2020-2022 as a major transition period. While new constellations being put forward are predominantly optical, SAR solutions and even hyperspectral or video are also now emerging.
The advent of new cost-efficient solutions collecting data at a higher frequency rate should transform services generation and delivery. Optimized analytics and increasing use of artificial intelligence, being pushed by both start-ups and established players, should contribute to an increase in the value proposition, and to the enlargement of use cases for satellite-based data.
“Under this approach, location-based services (LBS) and finance are relatively new markets with a large potential – the two combined could represent a revenue opportunity of more than $2 billion in 2027,” said Pacôme Révillon, CEO of Euroconsult. “LBS markets are built around the monitoring of specific point targets; the finance sector is similar in the change detection analytics being built, but with a clear focus on financial institution end-users.”
Selected performance indicators include:
- • The commercial satellite data market exceeded $1.3 billion in 2017, of which over $850 million was generated with the intelligence and defense community. Cumulative manufacturing revenues of EO satellites should total approximately $35 billion over the next ten years.
- • From a government perspective almost 50 countries will launch satellites over the next ten years. Morocco and Pakistan were the latest new countries to launch Earth observation satellites; developing EO programs should represent $3.8 billion in market value over the next decade.
The fast-evolving capabilities and the challenges attached to the development of business opportunities should favor a transformation of the ecosystem. While government and private end-users will be eager to leverage new capabilities, strategic partnerships and/or different forms of consolidation and vertical integration should contribute to reshaping the industry in the next three to five years.
About the Report
Satellite-Based Earth Observation, Market Prospects to 2027 provides an assessment of the current EO value-chain, with forecasts as to how this may evolve leading to 2027. Each aspect of the value-chain is taken in turn from government and private investment down to value-added services, providing a full 360° view of the opportunities and issues related to the Earth observation sector and how these trends will progress over the coming 10 years.
