Aerial Smart Weapons - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Aerial Smart Weapons Market size is estimated at USD 6.47 billion in 2024, and is expected to reach USD 9.03 billion by 2029, growing at a CAGR of 6.92% during the forecast period (2024-2029).

The aerial smart weapons market is expected to witness significant growth in the coming years, owing to the rising demand from diverse end users and regions. The changing nature of aerial warfare and the growth in defense spending toward developing and procuring advanced weapon systems for military aircraft are expected to drive the aerial smart weapons market during the forecast period.

The market is expected to undergo various innovations and developments as the players compete to offer advanced and cost-effective smart weapon systems. Technological advancements, in terms of miniaturization of electronics, material technologies, propulsion, and guidance systems, are expected to aid the growth of the aerial smart weapon systems market during the forecast period.

The market studied is also expected to face some challenges, such as government regulations, export controls, and ethical issues, which may limit the market growth. However, the market opportunities outweigh the market challenges, and the aerial smart weapons market is projected to grow positively during the forecast period.

Aerial Smart Weapons Market Trends

Missile Segment is Expected to Witness Highest Growth

The missile segment is anticipated to occupy the largest market share over the forecast period due to the increasing demand for advanced guided missiles from the defense forces. The key factors driving the growth of the missile segment are significant increases in defense budgets by both developed and developing nations, an increased use rate of advanced weapons, and changing aerial warfare worldwide. For instance, in 2022, the global military expenditure reached USD 2,240 billion, a growth of 6% from 2021.

The development of network-enabled weapons, hypersonic missiles, and artificial intelligence-based weapons are some of the latest trends in the missile segment that are expected to transform armed force operations. Various countries are partnering with aerial weapon system manufacturers to develop advanced smart missiles to counter future threats. For instance, in November 2023, MBDA announced that it partnered with the United Arab Emirates to co-develop smart weapons with an initial production date of 2030. The partnership was established to develop the Smart Glider and Cruiser air-to-ground missiles dedicated to future combat with AI-embedded capabilities.

Various countries are also procuring advanced military drones equipped with smart weapon systems to counter evolving threats and as a modernization effort to the changing nature of warfare. For instance, in May 2023, the Netherlands announced that it would begin arming its reconnaissance MQ-9 Reaper drones with laser-guided GBU bombs and air-to-surface Hellfire missiles under a modification and weapons procurement of USD 107-268 million. The initial deployment of the armed drones is expected by 2025, and the full deployment will be three years later. Overall, such developments and procurement orders of advanced weapons systems are expected to accelerate the growth of this segment during the forecast period.

North America is Projected to Dominate the Market During the Forecast Period

North America is expected to occupy the largest market share in the aerial smart weapons market due to large-scale developments in the market by the United States. For instance, in 2022, the US military defense expenditure rose to USD 877 billion, a growth of 9% compared to 2021. The increased investments toward technologically advanced weaponry are due to the growing threat to the country from the enhanced capabilities of China and Russia on the battlefield. The country is divesting huge amounts for the development and induction of advanced smart weapon systems ranging from smart bullets to nuclear-capable hypersonic-guided weapons. The country has been involved in several aerial smart weapon procurement programs that are expected to drive the market studied in the years to come.

For instance, in January 2023, the US Navy awarded RTX Corporation a USD 317 million contract to develop 408 AIM-9X precision short-range infrared-guided air-to-air missiles for the navy's jet fighters and other combat aircraft. Similarly, in March 2023, the US Air Force awarded RTX Corporation a USD 320 million contract to produce and deliver 1500 StormBreaker smart weapons, which are air-to-surface, network-enabled weapons that can engage moving targets in all weather conditions using its multi-effects warhead and tri-mode seeker. The StormBreaker is fielded on the F-15E Strike Eagle, with testing underway on the F-35B and F/A-18. Such developments are expected to bolster the market prospects in the region during the forecast period.

Aerial Smart Weapons Industry Overview

The aerial smart weapons market is semi-consolidated, with local as well as international players providing various types of missiles, munitions, guided rockets, and guided projectiles for aerial forces across the world. Other than international players, several state-owned companies have been developing and manufacturing smart weapons for their respective countries while also looking at export opportunities.

Some of the prominent players in the market are BAE Systems PLC, RTX Corporation, Lockheed Martin Corporation, General Dynamics Corporation, and Northrop Grumman Corporation. Due to the changing nature of aerial warfare, several nations are planning to develop and induct next-generation aerial smart weapons for their militaries. As the focus is increasing on developing indigenous smart weapons, local manufacturers can grab the opportunity to increase their market share through higher R&D investments, which will help their growth during the forecast period. Players can also establish joint ventures and partnerships with other players to enable technology transfer, which will facilitate innovations and aid the development of highly sophisticated aerial smart weapons during the forecast period.

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