Market Overview

Traditionally, the cost of using (i.e., purchasing) images and data obtained from artificial satellites used to be expensive, despite their limited quality and functionality, which was in limited demand. However, in recent years, the usage fees have decreased, while the diversity of collected satellite data has increased to include optical and synthetic aperture radar (SAR) image data, as well as various other sensor data. The quality and resolution have also improved. These improvements have increased demand from a variety of private companies and individuals, in addition to existing users, such as public offices and municipalities.
Satellite data and images have a variety of applications, including land surveying or identifying aging areas of houses, and confirming abandoned farmland, disaster prevention work, and social infrastructure monitoring for public offices and municipalities, field monitoring for agriculture, forestry, fisheries, and livestock sectors, environmental measurement for the nature and geography sector. They are also used to calculate insurance amounts and provide data for futures markets in the finance sector, monitor crustal movement, manage construction progress, and provide automotive driving assistance for construction or heavy machinery in the construction and civil engineering sectors, and provide locational information and tracking data for maritime and land transport in the logistics sector.

Noteworthy Topics

Private Demand Expected to Grow, Driven by Expanding AI Applications

Until around the year 2000, almost all demand for satellite data applications came from government agencies and municipalities. Since then, demand from private companies has gradually increased. Nevertheless, in FY2024, the satellite data application service market is projected to receive a little less than 90% of its demand from the public sector, which contributes as a driving force of the market.
Although the public sector is expected to remain pivotal, the growth rate of demand from the private sector is likely to exceed that from the public sector. By FY2030, demand from the public sector is expected to account for around 80%.

Incidentally, the increased use of artificial intelligence (AI), including generative AI, improves the quality of satellite-derived images and data. These improvements are expected to increase the value of satellite data application solutions and boost satellite data application services.

Alignment with AI is highly anticipated in satellite data applications, especially in the private sector. For instance, if satellite images will be able to diagnose degradation in social infrastructure monitoring, they will transform inspection processes by replacing traditional visual checks with a more efficient analytical inspections using satellite images.

Future Outlook

The domestic satellite data application service market based on company sales was 18.2 billion yen in FY2023, marking a 13.0% increase from the previous fiscal year. This growth occurred because many suspended projects were resumed after being put on hold during the pandemic, resulting in favorable sales at major vendors. On the demand side, satellite data application services were adopted as a part of efforts to address labor shortages and improve work efficiency.
For FY2024, the market anticipates continuous growth, projecting an 11.0% increase from the previous fiscal year to reach 20.2 billion yen. Strong sales from promising space ventures and robust efforts from major IT vendors in satellite data application solutions, and the acquisition of proof of concept (PoC) in satellite data applications in peripheral areas, driven by the Japan Aerospace Exploration Agency (JAXA)’s Space Strategy Fund Department, are likely to contribute to this growth. 

Research Outline