Targeting Pod Market Report 2025

The targeting pod market size has grown strongly in recent years. It will grow from $3.82 billion in 2024 to $4.14 billion in 2025 at a compound annual growth rate (CAGR) of 8.4%. The growth during the historic period was driven by the rising number of military aircraft upgrades, expanded use of forward-looking infrared systems, increased demand for precision strike capabilities in modern combat, growing need for FLIR sensors in targeting pods, and the expanding deployment of unmanned systems.

The targeting pod market size is expected to see strong growth in the next few years. It will grow to $5.64 billion in 2029 at a compound annual growth rate (CAGR) of 8%. The projected growth during the forecast period is driven by rising demand for surveillance systems, escalating threats from unmanned aerial vehicles (UAVs), expanding defense modernization initiatives, increased adoption of UAV payloads, and a growing need for enhanced situational awareness. Key trends expected include the integration of artificial intelligence (AI) for target recognition, technological advancements in laser designation, development of miniaturized pod systems, progress in sensor fusion methods, and incorporation with next-generation fighter aircraft.

The growing number of military aircraft is expected to drive expansion in the targeting pod market in the coming years. Military aircraft include both fixed-wing and rotary-wing planes used by armed forces for defense, reconnaissance, transport, and combat purposes. This increase is fueled by rising geopolitical tensions, leading nations to enhance their aerial defense capabilities by expanding their fleets. Targeting pods improve the effectiveness of military aircraft by enabling precise detection and designation of targets, making them crucial for contemporary combat missions. These systems boost mission accuracy through the integration of advanced sensors and laser designators, thereby enhancing operational efficiency and minimizing collateral damage. For example, the UK Ministry of Defence reported that the number of fixed-wing aircraft in the UK armed forces reached 556 in 2022, up slightly from 555 in 2021. Thus, the rising count of military aircraft is fostering growth in the targeting pod market.

Key players in the targeting pod market are focusing on the development of cutting-edge products, such as electro-optical targeting systems, to improve target detection, tracking precision, and mission performance in challenging combat scenarios. Electro-optical targeting systems combine optical and electronic sensor technologies to detect, identify, track, and designate targets with high accuracy. For instance, in July 2024, Lockheed Martin Corporation, a U.S.-based aerospace and defense company, introduced the Advanced Sniper Networked Targeting Pod. This enhanced pod features electro-optical sensors, a conformal antenna, and mobile ad-hoc network (MANET) radio capabilities, facilitating secure, high-speed data sharing among F-16 and F-35 aircraft as well as ground units. The system functions as a communication hub, forming a decentralized kill web that boosts real-time coordination and operational efficiency across air, land, and sea forces, while maintaining its core precision targeting and surveillance functions.

In December 2024, the United States Marine Corps partnered with Northrop Grumman Corporation to improve tactical precision through enhanced connectivity. This collaboration aims to upgrade the AN/AAQ-28(V) Litening targeting pods by incorporating BE CDL waveform technology, which allows secure, multiband, real-time data exchange between aircraft and ground units for better mission coordination and effectiveness. Northrop Grumman Corporation, based in the U.S., is a leading manufacturer of advanced targeting pod systems.

Major players in the targeting pod market are Raytheon Technologies, The Boeing Company, Lockheed Martin Corporation, Northrop Grumman Corporation, BAE Systems plc, Thales Group, L3Harris Technologies Inc., Elbit Systems Ltd., Israel Aerospace Industries, SAAB Group, Leonardo DRS, Hensoldt AG, Excelitas Technologies Corp, Teledyne FLIR LLC, Rafael Advanced Defense Systems Ltd, ASELSAN A.S., Hanwha Systems Co. Ltd., HGH Infrared Systems, Andover Corporation, and Xi'an Supersonic Aviation Technology Co. Ltd.

North America was the largest region in the targeting pod market in 2024. The regions covered in targeting pod report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the targeting pod market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sharp hike in U.S. tariffs and the associated trade disputes in spring 2025 are notably impacting the aerospace and defense sector by raising costs for titanium, carbon fiber composites, and avionics materials largely sourced from global suppliers. Defense contractors, locked into fixed-price government contracts, absorb these added costs, while commercial aerospace firms face airline pushback on higher aircraft prices. Delays in component shipments due to customs bottlenecks further disrupt tight production schedules for jets and satellites. The industry is responding by stockpiling critical materials, seeking waivers for defense-related imports, and collaborating with allied nations to diversify supply chain.

A targeting pod is an external sensor system mounted on military aircraft, designed to detect, identify, and designate targets for precision-guided weapons. By integrating advanced technologies, these pods enhance targeting accuracy, especially in low-visibility conditions. They are essential in modern air-to-ground and air-to-air operations, improving strike precision, reducing collateral damage, and boosting mission effectiveness.

The main types of targeting pods include forward-looking infrared (FLIR) pods, laser designator pods, and laser spot tracker pods. FLIR and laser designator pods are sophisticated sensor systems installed on military aircraft or unmanned aerial vehicles (UAVs) that support surveillance, target identification, and precise engagement. These systems consist of components such as FLIR sensors, charge-coupled devices, environmental control units, moving map systems, digital data recorders, processors, video data links, and high-definition displays. They are utilized on various platforms, including combat aircraft, UAVs, attack helicopters, and bombers, and serve users like original equipment manufacturers (OEMs) as well as the aftermarket sector.

The targeting pod market research report is one of a series of new reports that provides targeting pod market statistics, including the targeting pod industry global market size, regional shares, competitors with the targeting pod market share, detailed targeting pod market segments, market trends, opportunities, and any further data you may need to thrive in the targeting pod industry. This targeting pod market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The targeting pod market consists of revenues earned by entities by providing services such as integration services, upgrades and modernization, training and simulation, technical support and consulting, and logistics and supply chain management. The market value includes the value of related goods sold by the service provider or included within the service offering. The targeting pod market also includes sales of electro-optical (EO) targeting pods, laser targeting pods, multifunction targeting pods, navigation and targeting pods, and reconnaissance and surveillance pods. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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