Around the world, there are eight different development projects that are turning a 70mm (2.75 inch) rocket into a laser guided missile. Several of these are American efforts. Two years ago, one of these missiles, DAGR was declared ready for service, but the U.S. Department of Defense didn't respond with any orders.
DAGR (and it's competitors) would appear to be an ideal weapon, as it also uses the Hellfire fire control system. Lockheed-Martin developed DAGR with their own money. Another one of the U.S. efforts, by Raytheon, is actually financed by the UAE (United Arab Emirates), and that weapon, Talon, is being readied for use by UAE AH-64 helicopter gunships. Like DAGR, Talon is compatible with existing laser designators, and aircraft equipped to use Hellfire missiles. The UAE expects to test fire Talon from its AH-64Ds by the end of the year. Talon has already passed numerous flight and firing tests. The UAE expects Talon to enter service next year. The big advantage of Talon is that it is one fourth the weight of a Hellfire, and one fourth the cost. That means AH-64s burn less fuel carrying them, and the Talon is as effective as a Hellfire in destroying the hundreds of small armed boats Iran plans to use in any war with the Arab states on the west coast of the Persian Gulf.
Three years ago, the U.S. Army cancelled work on a similar effort, APKWS (Advanced Precision Kill Weapons System). All these weapons are basically a 25 pound 70mm rocket, with a laser seeker, a six pound warhead and a range of about six kilometers. Laser designators on a helicopter, or with troops on the ground, are pointed at the target, and the laser seeker in the front of the DAGR homes on the reflected laser light. The guided 70mm rocker weighs about 30 pounds (the 70mm rocket plus the guidance package).
The 2.75 inch (70mm) rockets were developed during World War II as an air-to-air weapon for use against heavy bomber formations. The Germans had developed a similar, and very successful weapon (the R4M), but before long it was noted that neither the Japanese nor the Germans had any heavy bombers, so the U.S. 70mm rocket was switched to air-to-ground use. Actually, the 70mm rocket was retained for air-to-air use into the 1950s, but it was never successful in that role.
The 70mm rocket became very popular in the 1960s, when it was discovered that the weapon worked very well when launched from multiple (7 or 19 tube) launchers mounted on helicopters. The 42-55 inch long rockets could be fired singly or in salvoes, and gave helicopter pilots some airborne artillery for supporting troops on the ground. There are many variations in terms of warheads and rocket motors. Some versions can go over 10 kilometers.
Developing a guided 70mm rocket took so long because the manufacturers underestimated the technical difficulties of getting the laser seeker and flight control mechanisms into that small a package, at a weight and price the army could afford. The price of the DAGR is about $20,000 each (about a third less than a smart bomb, and much less than a Hellfire missile). The AKWS developer, BAE, believed it was close to perfecting AKWS, but Congress ran out of patience and money for it.
The guided 70mm rocker is to be used against targets that don't require a larger (hundred pound), and more expensive Hellfire missile, but still need some targeting precision. In tests, the APKWS hit within a few feet of the aiming point, and the DAGR and Talon are just as accurate. These missiles make an excellent weapon for UAVs, especially since you can carry four of them in place of one Hellfire. The launcher for DAGR is built to replace the one for Hellfire, but carry four missiles.
Apparently the orders for DAGR, and most similar weapons, have not been forthcoming because the Hellfire is doing the job and there just isn't a big demand for a smaller missile.