It's been a good year for unmanned aerial vehicles -- and a great year for investing in 'em. But 2008 is drawing to a close, and here at the Fool, we've got time to squeeze in just one last update on developments in the field. Herewith, an update on who's who and what's what in the exciting world of flying model airplanes ... that kill.

Something(s) old ...
First down the runway comes Textron (NYSE:TXT). The company's had a tough 12 months, what with its financing business basically imploding and all, but over in the UAV wing at Textron HQ, they're breaking out the bubbly and celebrating a banner year. In October, Textron's AAI subsidiary won a $242.1 million contract to sell the Pentagon 17 "Shadow" Tactical Unmanned Aircraft Systems. Thirteen go to the U.S. Army, and the USMC will pick up the remainder. The biggest part of the news? This single order constitutes 15% of all Shadow systems contracted by AAI to date.

Also worth noting: Shadow usage is increasing at a phenomenal rate. In May 2008, Shadow hit the 300,000-hour mark for total flight hours. Four months later, it crossed the 350,000-hour mark. Run-rate that out and it looks like the military is increasing Shadow usage at an annual rate of close to 50% -- a fact that bodes well for increased sales.

And speaking of increased sales, Honeywell (NYSE:HON) landed a bunch of 'em last month. Its "T-Hawk" UAV -- formerly known only as the "Micro Air Vehicle" or "the flying coffee can" -- had previously done tours of duty in Iraq. But in November, the T-Hawk finally scored its first production-scale contract. Valued at $65 million, the contract calls for Honeywell to churn out 90 T-Hawk systems for the Pentagon over the course of next year.

Something new ...
Increasing usage of existing platforms is nice and all, but in defense tech it’s always important to see successful tests of new platforms that can yield future revenue streams. Fortunately, the granddaddy of UAV companies, privately held General Atomics, is working on just this. Its latest iteration of the venerable Predator drone, the "Sky Warrior," underwent successful testing of a new automatic take-off and landing system with a little help from L-3 Communications (NYSE:LLL), which built the craft's line-of-sight Tactical Common Data Link. This just goes to show that you don't actually have to build UAVs to profit from the trend.

Something borrowed ...
Meanwhile, over in Russia, a costly victory in the short war in Georgia revealed numerous shortcomings in the post-Soviet military. Chief among these is a significant lack of UAV capability. To rectify this, the Russians announced late last month that they will buy "samples" of UAV systems from Israel. Presumably, the drones would come from Israeli defense concern Elbit Systems (NASDAQ:ESLT), which sold the same Hermes UAVs to Georgia before the war. The performance of the drones may have helped to convince the Red Army of this gap in its technological arsenal.

(Whether further sales are forthcoming, if I'm reading correctly between the lines, will depend on whether the Russians can successfully reverse-engineer these "samples" and build UAVs of their own.)

... and Boeing's blue
Elbit Systems may in fact be the biggest UAV success story you’ve never heard of. Just last week, the firm won an Israeli Defense Forces tender to manufacture mini-UAVs for all IDF Ground Forces battalions. Who else competed this time is not known, but the firm's winning product, the Skylark-I, is considered in the same class (size-wise) as AeroVironment's (NASDAQ:AVAV) successful Raven UAV and has on occasion competed for contracts against Boeing's (NYSE:BA) larger ScanEagle.

What's more, Elbit is winning contracts not just at home but around the globe, in nations as far-flung as Australia, Canada, France, Sweden, and Mexico. If Elbit keeps going like it has been, I have to wonder if it (and not Northrop Grumman (NYSE:NOC), as I have previously posited) is going to be the company to watch in 2009 and beyond.

Next stop, the future
And that wraps up the year 2008 in UAVs, folks. But what can we expect in 2009 and beyond? Here's a small sampling: Scientists and engineers at Texas Tech University and the University of Florida are hard at work on a UAV that can walk, sail, and fly like a ... prehistoric Pterodactyl.

So let's see: Flying dinosaur, bird, artificial bird, and artificial flying dinosaur. Looks like evolution has come full circle. Happy New Year, everyone!

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