Has China Won The Drone War?

CES 2017: Chinese Drones Everywhere

Benjamin Joffe , CONTRIBUTORThought leader & global investor in IoT, Robotics & more on Forbes

Judging by what I saw at the drones area of the CES Consumer Electronic Show in Las Vegas earlier this month, it seemed like China’s victory was total.Xiaomi was displaying a drone with a 4k camera from for a mere $433; in China, Tencent launched a foldable 4k drone for $299. 

Here are a few things to consider:

China Has Won The (First) Consumer Drone War

Technology that enable a remote-controlled stable flight, which impressed a few years back, is now widely available.

“For outdoor imagery it is impossible to compete because of the low technology barriers. Once you start hitting commoditization Chinese companies have a massive edge. Trying to get in DJI’s way is pretty much death,” says Jeffrey Tseng, Founder of the San Francisco-based startup Aevena, which develops indoor drones.

This is indeed what 3DR learned when it switched from its hobbyist niche to mass market.

According to Jenny Lee, General Partner at GGV Capital, a cross-border fund active in hardware (Lee herself is a former drone engineer), the consumer drone market is now going through a consolidation phase.

But is the drone market now in the hands of China’s DJI, Yuneec, EHANG, Hover Camera and their likes?

Maybe not. Business use cases require specialized machines and software, and even the consumer market is evolving as software takes precedence. For instance, Juuk, a Silicon Valley-based startup that HAX (the hardware accelerator I help run) invested in, operates based on the conviction that “if you can’t beat them, join them,” by working with Chinese companies to build a drone that interacts and plays different games with you without a remote. Former staff from leading drone companies are also likely to play a key role in the next generation.

More Opportunities In the Commercial Drones Market

This is a consequence of the diversity and specificity of their requirements. Regulations are also crucial and vary with industries and location–sometimes giving an advantage to emerging markets. Beyond the often talked-about delivery drones, the first applications are in construction, agriculture and mining: they operate on private land, with people following safety procedures or equipped with hard hats. Farmland Keeper is a GGV investment which, for instance, does crop-dusting in China.