Move Over China, Here Come the American Drones
The popularity of drones is skyrocketing. According to market research company Gartner:
Production of drones for personal and commercial use is growing rapidly, with global market revenue expected to increase 34 percent to reach more than $6 billion in 2017 and grow to more than $11.2 billion by 2020. Almost three million drones will be produced in 2017, 39 percent more than in 2016.
Among the companies making drones, there’s one behemoth that’s selling a majority to personal consumers: DJI, a Chinese company, offers a range of models costing from a few hundred dollars to nearly $2000. DJI was founded in 2009 by an engineer, Frank Wang, who as a child, used to play with radio-controlled model airplanes.
While most Chinese companies begin by building low-cost copies of existing products, DJI is one of the first Chinese companies in the consumer electronics space to create their products from scratch. The company has done an exceptional job in engineering and marketing, creating drones in many sizes and shapes.
Many companies have discovered how difficult drones are to design. They’re one of the most complex consumer products, requiring expertise in numerous technologies that all need to work reliably and in harmony. A failure of any part of a drone system could lead to a crash or even an injury. It requires expertise in mechanical design, electronics, optics, power management, radios, and especially software.
Drones need to be as light as possible so that their flight times can be sufficiently long. A high-resolution camera needs to be stabilized in flight to allow it to take jitter-free images, whether the drone is stopped in mid-air or traveling over a wide range of speeds, following a subject on the ground. And drones require lots of sensors and wireless radios, including GPS, WiFi, sonar, gyros, accelerometers, magnetometers, barometers, and geo-aware image sensors. Software expertise is needed for all these systems to operate together and for the app that is used to control the drone in flight.
U.S. companies have struggled to compete. GoPro developed their Karma drone that works with their GoPro cameras, but the product initially was recalled for suddenly falling from the sky and had to be redesigned. The Karma is now available for $800.
Another startup, Lily, raised $34 million in advance sales with a compelling video, only to file for bankruptcy without shipping a single unit. They're now being sued by the San Francisco District Attorney's Office for faking their video and misleading customers.
A third drone company, 3D Robotics, co-founded by Chris Anderson, the well-regarded editor-in-chief of Wired, raised $180 million over several years from companies such as Qualcomm and Autodesk, and a number of venture capitalists. They opened offices in Silicon Valley, Austin, and Tijuana and hired 350 employees. But the company’s Solo drone also failed to take flight.