Despite its relatively young age, the drone market has already become ultra-competitive. The days where there were only a few competitors in the market are now over, as numerous manufactures are now seeking to corner this emerging market. The companies that are now up to their necks in this ruthless battle have found a new El Dorado that could be the answer to all their problems: the professional world.
The vast, highly competitive drone market
The drone market has only recently made an appearance, and while only a few manufactures were active at the very beginning all this quickly changed. As more companies recognized the potential this sector held, the greater the competition became as more manufacturers moved into this sector. When you attend larger trade fairs, such as IFA 2016 in Berlin, you realize how important drones are becoming as entire booths are dedicated to the latest innovations in drone technology. Smartphone manufacturers like Xiaomi through to brands like GoPro are now all seeking to get in on the game.
The market has become less profitable due to the price war
Although the sector is still quite new and expanding all the time, it's not good news all round within the drone market. In recent months, many recreational drone manufacturers have been encountering serious problems. Lily Robotics, a promising start-up launched in 2015 with the aim to develop a ‘autonomous’ drone that would be able to follow its owner and film them in HD thanks to GPS. After two years of waiting and tens of millions of dollars in investment, the project was finally closed without having produced any devices. Most recently it was Parrot, one of the market’s shining stars, that announced the dismissal of 290 of their 1080 employees at the beginning of 2017.
All this is the result of a pricing war between the various manufacturers, which has inevitably made the market less profitable. The main culprit behind is none other than the Chinese company DJI, which entered the market with an aggressive marketing strategy and very competitive prices. Faced with this situation, most of the larger manufacturers have decided to change tactics and focus on the professional world, as drones can be used for a number of tasks.
The professional world: a long-term and rewarding clientele
The decision makes complete sense. According to PwC, the market for services provided by drones could reach up to $115 billion by 2020, mainly within the construction, agricultural and security industries. DJI, Yuneec and even Parrot are now trying to invest in these areas as quickly as possible by creating models that are optimized for the needs of these professionals.
The ability to integrate various different sensors makes drones ideal for a number of industries: terahertz (electromagnetic waves) to oversee construction, LiDAR (a surveying method that takes measurements with a laser light) for 3D mapping or topography, multispectral or hyperspectral imaging for the agricultural sectors, and thermal infrared imaging for surveying buildings.
The market for services provided by drones could reach up to $115 billion by 2020
MWC 2017 confirmed this trend. DJI, one of the few brands to make the trip to Barcelona, made the most of the conference to introduce its new commercial drones. The star of the show was undoubtedly the Matrix 200, the first professional drone for industrial use. It’s a super-strong drone designed to fly in all weather conditions (rain, wind, snow…). To do this, the Chinese company equipped the drone with four motors, sensors and all types of electronics and made it IP43 certified to fly in bad weather. It has multiple uses and flight time can reach up to 30 minutes.
This type of drone is more expensive than recreational drones. Even though DJI didn’t revealed the price, as this drone will be in direct competition with the Yunec models that cost between $5,000 and $18,000 it should be released with a comparable price.
Data analysis: The next El Dorado for manufacturers
However, the professional world isn’t the only area drones could used in. Much of the value added will very soon come from a drone's ability to both process and analyse the data they can collect. In this respect, the market for drones is about to get interesting, as they will inevitably become a key professional tool in the future.
Have you ever used drones as part of your work? Have these been a useful tool? Let is know in the comments below.