Competition Intensifies Among Chinese Drone Makers

Driven by the increasing enthusiasm for high-definition aerial imaging for hobbyist purposes, recreation activities, and aerial games, Tractica forecasts that global shipments of consumer drones will grow at a rapid pace, increasing from 6.4 million units in 2015 to 67.7 million units annually by 2021. The possibilities of combining augmented reality (AR) and virtual reality (VR), along with the expanded capabilities of drones and smart devices, are vastly expanding new opportunities in the market. While these opportunities are exciting for industry participants of all sizes worldwide, a fierce battle of the giants is already taking place in China. These giants are the Chinese consumer drone makers who currently dominate the global market and who show no signs of complacency.

DJI has heated up the competition with the launch of its Phantom 4 in March 2016. Phantom 4 is the latest addition in the Phantom series of drones that has a sport mode, which gives the drone a top speed of 72 kph, an obstacle sensing system that can sense objects at a minimum of 500 pixels in size, and smooth video capture in slow motion, along with feature enhancements to earlier generations. The Phantom 4 is priced at $1,199 in the United States (€1,399 in Europe and CN¥7,499 in China). Headquartered in Shenzhen, which is widely considered to be China’s Silicon Valley, DJI benefits from direct access to suppliers, raw materials, and a young and creative talent pool, all of which are necessary to sustain success. Drawing on these resources, DJI has grown from a single small office in 2006 to a global workforce of over 3,000 employees with offices in the United States, Germany, the Netherlands, Japan, Beijing, and Hong Kong. So far, DJI has secured total equity funding of $105 million from Sequoia Capital, LightHouse Capital Management (Shanghai), and Accel Partners.

According to Derrick Xiong, co-founder of drone maker Ehang, “Asia is the new frontier.” By offering drone flying lessons at universities and renting drones to tourists through local travel agencies, Ehang has started to expand its business in the Asian market. Ehang is the maker of Ghostdrone, which has been sold in over 70 countries across the world. Its newly launched Ghostdrone2.0 is in line with the company’s goal to develop affordable and easy-to-operate drones using iOS or Android devices. Improvements were made to the stability and video recording compatibility, and the Ghostdrone2.0 also offers complementary VR goggles that enable the user to have a first-person view from the sky, as well as to control the camera angle. The Ghostdrone2.0 is priced at $399 in the United States (€539 in Europe), whereas the Ghostdrone2.0 with VR is priced at $899 (€989 in Europe). Founded in April 2014, Ehang is headquartered in Guangzhou, China, with branches in Beijing, Shanghai, and San Francisco. Ehang is one of the fastest growing companies in the drone industry and is backed by venture capitalists, such as GGV Capital, and has raised total equity funding of $52 million.

With the introduction of Breeze in the consumer drone market a few days ago, Yuneec is confident that it will crack the mass market by targeting consumers who want a drone to document vacations or to take selfies and share their photos and videos directly to social media accounts as soon as the flight is over by using the companion app. Along with a 4K camera, the Breeze comes with five different flight modes and an indoor positioning system that uses optical flow and infrared positioning sensors. “With the popularity of selfies at an all-time high, we set out to create the ultimate, user-friendly flying camera which allows people to take their photos to new heights,” said Tian Yu, Chief Executive Officer of Yuneec International. The Breeze drone is likely to be priced at $499 in the United States. Yuneec was founded in 1999 and is based in Hong Kong with offices in the United States, China, and Germany. Yuneec’s core technologies include manned aircraft, aerial photography and video (APV) systems, and a line of radio-controlled aircraft for hobbyists. Intel invested $60 million in Yuneec through its venture arm Intel Capital in 2015.

Apart from DJI, Ehang, and Yuneec, which all have global reach, fierce competition is emerging from many other Chinese players, such as Xiaomi, ZeroTech, AheadX, and Walkera in an attempt to grab a slice of the global consumer drone market pie. Xiaomi, the company best known for its smartphones, is entering the drone business with the Mi Drone. ZeroTech, in partnership with Qualcomm and Tencent, is developing Dobby, a foldable drone made for selfie fans. Meanwhile, AheadX’s TransdroneA4, Walkera’s Voyager Series, and EulerSpace’s Pi Series are hoping to give their rivals a run for the money.

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