1 Introduction 1.1 What is this Report About? 2 Demand Drivers, Industry Trends, Challenges 2.1 Demand Drivers 2.1.1 Need for advanced surveillance and combat capabilities creating market opportunities for UAV Payloads 2.1.2 Demand for Mini UAVs driving demand for compact miniaturized UAV Payload 2.1.3 Incorporation of UAVs and associated payloads in areas other than defense 2.1.4 Territorial disputes along with internal and external security threats to increase global demand for UAV payload 2.2 Industry Consolidation 2.2.1 Joint ventures expected to increase over the forecast period 2.2.2 Large defense companies are acquiring smaller firms to cater emerging demand 2.2.3 Large defense companies are acquiring smaller firms to cater emerging demand 2.3 Technological developments 2.3.1 Stratospheric payloads to provide enhanced persistent surveillance capabilities in the future 2.3.2 Hyper spectral sensor payloads to provide enhanced monitoring and detection capabilities 2.3.3 Strained-Layer-Superlattice Infrared Camera for UAV Payloads 2.4 Market Trends 2.4.1 Open architecture design to favor further UAV Payload development 2.4.2 Demand for smaller UAVs driving developers to shrink the payload systems 2.4.3 Changing role of UAVs from ISR to hunter drive demand for weaponry payloads 2.5 Key Challenges 2.5.1 Defense budget cuts expected to hinder the growth of the UAV Payload industry 2.5.2 Market dominated by a few major players 2.5.3 International associations such as Missile Technology Control Regime restricting UAV Payload exports 2.5.4 Miniaturization of UAVs necessitating smaller payload integration to pose a major challenge for manufacturers 3 Appendix 3.1 Methodology 3.2 Definitions 3.3 About SDI

Table 1: Joint Ventures and Co-operation Agreements