The increasing investments in research and development for advanced avionics systems by major companies is fuelling the market growth. Moreover, the leading companies as a strategic step are collaborating with domestic players to increase their footprint across the globe. For instance, In August 2016, Lockheed Martin established a research and development (R&D) facility in Melbourne. Additionally, the companies are competing with each other to win the contracts and gain a high deal value. In January 2019, US Air Force (USAF) awarded a contract to Northrop Grumman for production, software and upgrades of the lightening advanced targeting pod which was valued at USD 1.3 billion.
- Widespread budgetary constraints may cause some defence economies to favour investment in the upgrading and modernisation of existing aircraft fleets through the addition of advanced avionics systems to extend their service lives.
- Collaborations and joint ventures of leading players with regional companies to manufacture military aircraft and avionics systems.
- Budgets for military aircraft avionics programmes are often limited in emerging markets
- R&D of military aircraft avionics is expensive and may preclude emerging defence economies from investing