Despite the burgeoning drones industry, especially in Israel, some observers have sounded a note of caution. ‘Samson Blinded’ pointed out that while drones are cheaper than piloted aircraft they are still expensive and are limited in many aspects. Furthermore the market for drones is somewhat limited and hampered by low production runs. Drones are in competition with increasingly sophisticated satelites for providing imagery.
Samson Blinded claims claims that the Israeli drones industry won’t prosper without the removal of American export restrictions. (Presumably these are restrictions imposed by the US on who Israel may sell drones to).
One of the reasons that drones have proliferated recently is because of rapid advances in many of the technologies needed to make drones work. But access to these technologies will soon be widely available, and it will be possible to buy many of the drone components almost off the shelf. Thus, Israel may lose its leading position.
Apparently, Israeli Air Industries, a major drone producer and developer of the Heron drone, has announced shifting of its production facilities to the US, to meet the needs of its US military customers. It also says that it will later shift all of its production to the US, except that needed to service the needs of the Israeli Military.
Another problem for the Israeli industry is that customers often prefer to have all or part of the drones they purchase made in their home country. The UK Watchkeeper programme is an example of this, where the UK has acquired the technology of the Hermes 450, but will build it in the UK. (It is not clear how much of the Watchkeeper is UK content, and how much is Israeli-or even sourced in other countries).
Recently IAI and Elbit Systems had a $185 milllion deal with Turkey to sell Heron drones to the Turkish military, under the condition that Turkish imaging equipment was fitted into the drones (actually the deal was to have 30% Turkish content in the drones). But the Turkish cameras were much smaller than the Israeli models, limiting the altitude that the drones could reach and the time they could stay in the air. This meant that the drones no long met Turkish specifications, putting the deal in jeopardy. (Of course there are other issues as well. Due to Israel’s contentious behaviour in Palestine, and a diplomatic incident, Turkish Israeli relations were strained. An extensive report and analysis of the deal can be found here).
In November 2009 UPI reported that Turkey had prevented Israel from participating in a NATO exercise that was later cancelled due to Israel’s exclusion. Demonstrating that the Israel’s drone industry is sometimes subject to hostile action resulting from the Israeli government’s behaviour. (By January, 2010, the deal was back on track again, as reported by Airforce Technology.Com).
Sometimes it works the opposite way. In 200X Israel had a very large arms deal with Georgia, which included supplying Georgia with drones. Georgia used these drones in its subsequent conflict with Russia. Later, impressed with the performance of the Israeli drones, Russia purchased $50 million worth of Israeli drones.