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"There are those that see JSF as the last manned fighter. I'm one that's inclined to believe that."
-- Adm. Michael Mullen, chairman of the U.S. Joint Chiefs of Staff
And it's time for investors to start believing that, too. When President Obama introduced his 2011 Defense Budget to Congress ("Hi! Glad to meet you! Can I borrow some money?") last month, one number that jumped right out at me was the $2.2 billion in funding requested for unmanned Predator and Reaper drones.
Another was the clear indication that the Navy will be pushing ahead with Northrop Grumman's (NYSE: NOC ) project to develop unmanned combat aircraft (UCAS), putting additional billions of revenues in play. It seems everywhere you look these days, people are talking about unmanned aerial vehicles (UAVs).
Even in college
By now you've all heard about the Air Force's new UAV pilot training school at Creech AFB in Nevada, where "pilots" are training specifically to "fly" planes hardly bigger than model airplanes. But did you know that Civilian U. is getting into the UAV game, too?
Our first major development in the UAV field this year comes straight from the University of North Dakota. (Motto: "Is it cold up here, or is it just me?") With an inaugural class of 12 students, the four-year degree in "Unmanned Air System Operations" aims to teach students to fly planes ... without ever taking a seat in 'em. Jeffrey Kappenman, who heads up the University's unmanned aircraft center, believes that civilian UAVs will become "a huge market in the future."
UAVs and ... Apple? And France?!
And it's not just Kappenman saying that, either. Not far away from Creech, the 2010 Consumer Electronics Show in Las Vegas featured (among other things) a major breakthrough in civilian UAVs, courtesy of ... France. The AR.drone, manufactured by French wireless systems company Parrot, is a remote-controlled minihelicopter piloted with use of an Apple (Nasdaq: AAPL ) iPhone with a Wi-Fi connection.
Much like the unarmed UAVs buzzing 'round the skies of Afghanistan and Iraq today, the AR.drone comes equipped with a video camera, which transmits footage direct to your iPhone as you "fly" the chopper. No word yet on whether it will become a required instructional tool at U-N.D., but I wouldn't be surprised.
You're ugly and your mama dresses you loud
Another potential buyer -- the U.S. military. Earlier this month we learned the Pentagon may be becoming increasingly displeased with the performance of Honeywell's (NYSE: HON ) T-Hawk UAV. Critics say it's too visible to the folks it's supposed to be spying on, too noisy, and afflicted with "poor reliability." On the plus side, the T-Hawk is still one of the few UAVs on the market capable of hovering in place and persistently "staring" from a fixed location, and Honeywell says it's hard at work fixing the T-Hawk's "issues." But if the AR.drone can do the same job as the T-Hawk, and with cheaper off-the-shelf technology ... Well, it looks to me like Honeywell's got a new breed of competitor. (And just ask Motorola (NYSE: MOT ) and Nokia how well they like being forced to compete with Apple. It's not a lot of fun.)
And speaking of fun ...
Returning our gaze to the military field, the big news this year is the fact that United Technologies (NYSE: UTX ) has taken the next logical step in the evolution of UAV tech: Taking full-size aircraft, and converting them into flying robots.
Specifically, the venerable Black Hawk helicopter. On Monday last week, United Technologies (UTC) announced a $1 billion effort to transform the Black Hawk into a "computerized aircraft" capable of flying with only one pilot aboard -- or when necessary, entirely unmanned. "Um, nice idea. But we had it first," commented Boeing (NYSE: BA ) , and likewise Lockheed Martin (NYSE: LMT ) also demonstrated an unmanned helicopter yesterday. It's beginning to look like unmanned helicopters are the next growth area in UAVs.
Of course, UTC admits that "computerizing" the Blackhawk could add as much as $2 million to the chopper's base $15 million price tag, but just think of the benefits. In future conflicts, the phrase "Blackhawk Down!" will no longer send chills of terror down commanders' spines. The cascade of casualties that resulted from a pair of Black Hawk crashes in Somalia years ago, when successive groups of rescuers became rescuees in short order, need not happen if unmanned Black Hawks are available to conduct the rescue ops.
"Blackhawk down?" No problem. Just boot up another robot Black Hawk.
So let's see if we can bring this all together, why don't we? At a cost of $2 million, we can pluck a couple of interns out of University of North Dakota's undergrad program, and with them, potentially save two Black Hawk pilots' lives. Sounds like a bargain to me.
In fact, if I might be so bold as to paraphrase the Admiral: "Some investors see the Blackhawk as the first unmanned rescue airlift helicopter. I'm inclined to hope that's true."
Take a trip down memory lane, and review the greatest UAV hits from 2009:
- "Hey! Who's Flying This Thing?" 2009 Edition
- "Hey! Who's Flying This Thing?" Part VIII
- Hey! Who's Flying This Thing? Revenge Of The Robots
- Hey! Who's Flying this Thing? Special Report
- Hey! Who's Flying This Thing?
Then step into our wayback machine, and relive the highlights of 2008:
- Hey! Who's Flying This Thing?
- Hey! Who's Flying This Thing? Part 2
- Hey! Who's Flying This Thing? Part 3
- Hey! Who's Flying This Thing? Part 4
- Hey! Who's Flying This Thing? Part Fin
Looking for other high-tech defense prospects for your portfolio? Check out Motley Fool Rule Breakers, where we're looking into options in everything from UAVs to missile defense, from bombproof trucks to bulletproof soldiers. 30-day free trials are available on-demand.