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The U.S. defense budget isn't about to collapse, but the massive spending growth is expected to coming to at an end.
Although the Pentagon's FY2006 suggests a flat budget in the future, the 2006 Budget provides $1.7 billion for unmanned vehicles.
And not all is included in defense budget, see Special Factors / Military investments and budgets.
Also, European militaries are investing to unmanned aircraft for reconnaissance drones and higher-end unmanned combat air vehicles.
Countries such as Japan,South Korea are investing to UAVs, read our analysis: UAVs in different countries and Location.

Xi helicopters, Base4Xi and Sensor4Xi and H2 devices itself combined with networking requirements are complex.
This kind of business requires sophisticated infrastructure and right talent to succeed, read our research Key People.

Technology:
~ Xi helicopters are rapidly deployable unmanned rotary wing UAV vehicles.
~ Bases4Xi are autonomous & unmanned bases which are being delivered rapidly to hostile areas.
~ Sensors4Xi are wireless networked sensors dropped from Xi helicopter.
~ Freedom Devices might be powered by hydrogen & fuel cells.
~ Pocket Rollable Display(PRD) are new kind of displays.
~ Freedom Device 1 has PRD embedded.
~ Resource Devices are hydrogen magazines and cartridges.


Laws and UAVs:

A company exporting UAVs have to secure an International Traffic in Arms (ITAR) agreement
from the U.S. Department of State which allows it to export UAV products to approved countries.

Risks with UAVs:
Acting Deputy Assistant Secretary for Nonproliferation Vann Van Diepen told a Senate subcommittee
that UAVs are potential delivery systems for weapons of mass destruction,
and there is a potential for terrorist groups to produce or acquire small UAVs
and use them for CBW (chemical and biological weapons) delivery.

He said the United States has attempted to use aggressively "a broad spectrum of measures"
to affect various aspects of the UAV proliferation threat, including the Nuclear Nonproliferation Treaty,
U.S. and multilateral export controls, the Missile Technology Control Regime (MTCR) guidelines,
sanctions against foreign governments involved in proliferation activity,
military and intelligence capabilities, and diplomacy.

Van Diepen warned that the increasing reliance on UAVs worldwide (including in civilian roles)
and the dual-use nature of much UAV technology will make job more difficult in the future.
Testimony of Vann Van Diepen, Acting Deputy Assistant Secretary of State for Nonproliferation,
Provided to the Senate Governmental Affairs, Subcommittee on International Security,
Proliferation and Federal Services, June 11, 2002

What are UAVs?
Unmanned air vehicles is the term used in the Missile Technology Control Regime (MTCR)
to refer to unmanned systems that fly within the atmosphere and are not rocket-propelled.
Different terms may be used in other contexts, but for MTCR purposes this term includes cruise missiles,
as well as target drones, reconnaissance drones, and other forms of UAVs, be they military or civilian, armed or unarmed.
UAVs can be as large as a jetliner or as small as a model airplane,
can be jet or propeller driven; there are even concepts for guided, unmanned blimps that would be UAVs.

Uses of UAVs.
UAVs have been in military service since at least the use of the V-1 cruise missile and target drones in World War II.
Since then, their use has grown dramatically in land-attack (in ground-, sea-, and air-launched modes),
reconnaissance, as targets, and even in some civilian applications such as pipeline inspection and crop-dusting.

The U.S. military is at the cutting edge, with nuclear-armed cruise missiles in the inventory for over 20 years,
and extensive use of conventionally armed cruise missiles and of reconnaissance UAVs in the Gulf War
and most of USA's subsequent military engagements.
As UAVs become more capable (as in the recent use of armed UAVs in Afghanistan),
they are taking on more missions that have been exclusively the province of manned aircraft;
this is expected to grow in the future, with the further development of so called Unmanned Combat Air Vehicles (UCAVs).

The UAV proliferation threat.
These same attributes of UAVs that are so useful for the U.S. military -- for example,
the ability to strike targets with precision and substantial protection from interception
and to collect real-time intelligence --
make UAVs in the hands of USA's adversaries a threat to USA and to USA's friends and allies.
Moreover, UAVs are potential delivery systems for weapons of mass destruction (WMD),
and indeed are ideally suited for the delivery of chemical and biological weapons (CBW)
given UAVs' ability to disseminate aerosols in the right places at the right altitudes.
And while, thus far, the primary concern for adversary use of WMD-armed UAVs has been with nation-states
-- such as Iraq, which has been converting L-29 trainer aircraft to UAVs for probable CBW use
- there is a potential for terrorist groups to produce or acquire small UAVs and use them for CBW delivery.

Dealing with the UAV proliferation threat.
U.S. efforts to impede threats stemming from the proliferation of UAVs
and their technology encompass a broad spectrum of measures.
As in other nonproliferation areas,
the U.S. attempts to use aggressively all of these tools to affect various aspects of the UAV proliferation threat.

Norms:
The Nuclear Nonproliferation Treaty prohibits the acquisition of nuclear weapons by non-nuclear-weapon states,
and the Biological Weapons Convention and Chemical Weapons Convention prohibit the acquisition of CBW.
This helps dissuade new countries from getting into the WMD (and thus, WMD-delivery) business,
impedes and de-legitimizes WMD proliferation,
and supports the other measures the U.S. takes to fight proliferation.
In addition, the MTCR Guidelines serve as a de facto norm against exports in support of delivery UAVs.

Export controls:
U.S. and multilateral export controls help deny proliferators access to the Western technology (the best technology)
that might be misused to develop WMD delivery systems,
making adversary UAV programs slower, more costly, and less effective and reliable.

MTCR Category I.
The MTCR from its inception in 1987 subjected exports of UAVs inherently capable of
delivering a payload of at least 500 kg
to a range of at least 300 km (so-called "Category I" or "MTCR-class" UAVs)
and their directly associated technology to an unconditional "strong presumption of denial."
Exports of complete guidance sets and warhead safing/arming/fuzing/firing subsystems useable in such UAVs,
and their directly associated technology,also are subject to a "strong presumption of denial."
Exports of the specially designed production facilities for Category I UAVs and their complete subsystems,
and the technology directly associated with such facilities, are prohibited.
(Of course, these strictures apply only to MTCR members and unilateral adherents.)
MTCR Category II.
Key components and materials useable in producing MTCR-class UAVs -- such as