According to NSR’s new report, “Global Satellite-Based Earth Observation (EO),” the EO industry is in the midst of a significant growth phase slated to generate revenues for many segments of the satellite industry.
With an expected increase in the total number of players (government and commercial), advancements in technology, both in sensors and image processing, and a greater political will by governments to embrace EO, the future holds much promise for this market.
NSR estimates that more than 180 new EO satellites will be launched by both government and commercial operators in the next decade. The commercial EO data market is expected to grow more than twice from its current level to reach US$2.2 billion in 2018, while EO Value Added Services (VAS) are projected to reach US$2.3 billion in 2018. NSR expects the high resolution optical imagery market will remain strong, but lower cost mid-resolution imagery will grow at a faster rate.
“EO players today are concentrating mostly on scarce government contracts with high resolution data and timely delivery,” Christopher Baugh, president of NSR, said. “But the expected increase in the number of commercial operators and service providers will augment the array of available applications and will lead to reduction in costs for customers as more of them start using EO data. To counterbalance free or low cost government data solutions, commercial operators must adapt and change their business model by maintaining a balanced portfolio and expanding their service offerings by providing complete geo-information solutions to meet new and unmet demand,” he added.
EO programs and applications have attracted wide attention through homeland and food security, environmental and climate change programs, as well as through the emergence of free web portals featuring powerful satellite imagery. The largest EO data clients are still governments, which represent more than 50 percent of total sales of satellite operators, but there are prime industrial users in the energy and agricultural sectors. Looking into the future, NSR expects the most promising applications to be in the areas of environmental monitoring, land management, natural disaster response, insurance and real estate, and tourism.
The associated expected increase in the number of satellites in-orbit will boost satellite manufacturing revenues, which are forecast to reach $1.7 billion in 2018, buoyed by the rising tide of demand from developing countries like Vietnam, Malaysia, Kazakhstan, and South Africa. However, NSR expects spacecraft to become somewhat commoditized as lower cost mini- and small-EO satellites are launched.