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Drone Market Strategies of Three Dominant Players

December 15, 2016

The drone market today can be described as a melting pot of different technologies, where combinations of hardware and software components and service features are provided to the end user.

In order to create sustainable success in this extremely fast moving market it is essential to maintain strategic partnerships or invest in a solid UAV portfolio. This isn’t a new process, but lately a few companies have been busy engaging in new partnerships and looking for investment opportunities and acquisitions.

Drone market-strategies-dii-drone360

(Drone Industry Insights)

Currently, the commercial UAV market consists of three dominant players, namely ParrotIntel , and DJI.

Parrot

Parrot started creating professional solutions at a very early stage. The acquisition of software manufacturer Pix4D (2012) and MicaSense (2014) were great strategic moves that paved the way to highly advanced end-to-end solutions. Even though profit margins in the commercial UAV market were very small at that time, Parrot invested heavily into their new strategy. Building a new market segment has never been easy (or cheap) and the low-cost competitors from Asia also apply a lot of pressure causing market deficits, especially in the hobby/prosumer sector. Despite this, the share of the drone sector within the Parrot Group increased from 38% (Q1 2016) to 54% (Q2 2016) due to this strategic move.

Intel

Intel Capital began investing into the drone industry in 2014. Moving into the drone market, Intel took a proactive approach by acquiring the missing pieces of the puzzle around its high-performance chip-sets. The Intel RealSense platform combines hardware and software in a way that enables cameras to process and understand images, and eventually providing “computer vision” to flying drones. Before acquiring the German drone manufacturer Ascending Technologies earlier this year, the two companies had already engaged in a close partnership to improve UAV sense and avoid systems. However, Intel’s biggest move was the acquisition of the mobile vision processor company Movidius. This acquisition paves Intel’s way toward autonomous systems ― and not only for unmanned aerial vehicles.

Other chip manufacturers such as Qualcomm and Nvidia have recently copied Intel’s strategy, as they see the immense opportunities in becoming technology suppliers for the emerging drone industry.

DJI

The third key player and dominant market leader DJI also started a number of new partnerships this year. While Intel and Parrot grew their drone business through acquisitions, DJI  uses partners to expand their business portfolio (such as the infrared camera maker FLIR, surveying expert Leica Geosystems, and micro ADS-B transponder manufacturer uAviniox). This strategy makes a lot of sense since DJI has everything it needs to bring drones up in the air and as such, does not have to acquire the technology. Partnering can be an extremely quick way to grow a company, particularly in times of rapid change. Without implementing difficult and time-consuming internal changes, DJI can expand the knowledge of different industry sectors, boost innovation, and increase its market share.

Initially partnerships were heavy on hardware, but the demand to deliver high-quality end-to-end products more quickly and at lower costs has become a fundamental part of the entire UAV industry.

Drone Industry Insights is a market and analytics company based in Germany.

Featured image: DJI

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