The Drone Report – 2017/2018 (Holiday Period, etc.). – Note – you can pay thousands of dollars for various white papers and guesses as to where the market is headed – many (most) of them are based on questionable data and Hopes & Dreams rather than what is actually happening. While we don’t claim perfection with our report, it does give a number of trends and ideas which are worth considering. NEW – for 2018 we are doing private consulting, speaking, analysis, tutoring and other such Industry efforts. This will mean less of a focus on the Droneflyers.com site…although we are open to partnerships and/or buyers who wish to expand their Drone Web Presence. Please contact us using the form below.
2017 should be considered a consolidation year for the Drone Market. However, questions still remain as to where we go from here. In order to give this report some structure, we will break it up into various categories as follows:
1. The Consumer Camera Drone Market – these are GPS based drones capable of taking stabilized video. The price range is $400 to $2000.
2. The Light and Medium Commercial segments – which can often crossover with the Consumer Drone Market. A price range of $600-$5,000 will be used for this segment.
3. FPV, Racing and DIY – seems to be an entirely different set of users and suppliers and seems to have revived and innovated.
4. Toy Drones – BIG Sellers in terms of quantity of units, but since the retail prices are lower ($10 – $150 for most units), it may be harder for the competitors to sustain profits and market share.
Most of the consumer drone market is controlled by DJI with numerous models in the price range. Other players which may have 2% or larger market share include Parrot (BeBop2), Yuneec, Autel Robotics, Xiaomi and GoPro (Karma Drone). As always, there are a number of other companies trying to muscle in on this market – none seem to have had success.
A subgroup within this category includes mobile controlled GPS models designed for close-in “fun” selfie and follow-me type of shots. Most are based on the Qualcomm SnapDragon reference circuit board which is effectively the “guts” of a camera drone. Wingsland, Hover, Dobby and Yuneec (Breeze) are examples of this type. Sales so far appear to be weak and the prices have dropped from $4-$500 to as low as $199. DJI kept their Spark Drone in two markets by providing an optional remote control – it is also the only model with a mechanical gimbal (vibration-free video) – with discounts, the basic model starts at $350-$400.
Reports from the field, google trends and other indicators show little or no growth in the Consumer Drone segment. One problem is that many pilots already own one or two models which work well – so they are unlikely to buy another until some really advanced features provide them extra value and save them time and money.
This is the first year for GoPro and their Karma Drone and they are surely making SOME sales – however, they are quite late to market and in terms of technology the unit is not at the head of the pack. Suffice it to say that Karma will not be the “game-changer” that GoPro claimed it would…they forecasted sales that would easily make Karma #2 in terms of Drone Revenue and would help save the company from its downward spiral. However, the winner BY FAR of the 2017/2018 Consumer Drone Segment is the DJI Mavic Pro – now available in various packages and colors. It’s safe to say this is a model that will satisfy most hobbyists – and booming sales (Mavic Pro may be the first million-seller model) show that this is what consumers desire.
Yuneec and Autel are plugging along – both are probably having a difficult time with growth….or with profitability for that matter!
But the real surprise of the Holiday Season may be the possible resurrection of Parrot. After 6 years they finally seem to be learning what people want – an R/C Controller! Their products – from the toys to the BeBop 2 FPV, appear to be hot sellers and their commercial line seems to be expanding nicely. I think they finally got someone in the company that the CEO is listening to. That’s the main thing – when you head the wrong direction and the market tells you so – correct it! Parrot was always ahead of their time but never really carved our a particular consumer market except for toys which didn’t satisfy because they flew away. I have recently succumbed and have one of those winged Parrot toys on the way – for $50 with the R/C I want to see if Parrot has changed. We’ll have a review soon!
If I had to hazard a guess, I’d say that sales of Camera Drones in the #1 (Consumer) category – in terms of dollars….in the US and Canada …. will be down 15% from last Nov/Dec/Jan (looking forward). After a few years of 50 to 100% growth, this definitely signals that the market is taking a rest.
New Products slated for introduction a CES and in 2018 will, once again, be appealing mostly to an audience that already owns one or more camera quads.
Light and Medium Commercial segments
With the clarification of the FAA rules and the Part 107 UAV Pilot’s Licenses (for commercial work), 2017 should have been a banner year for income related to both sales – and to contracting of jobs using these models. However, our take is that this has not occurred to the extent that many were hoping – for various reasons. We will list them below:
Many pilots already own models capable of light commercial work such as real estate, basic mapping and other similar projects.
The prices at the bottom end (Real Estate Work) have been set so low…by Drontebase and others who are acting as “brokers”, that the impetus for pilots to “fly for money” isn’t as strong as it should be. Some jobs pay as little as $25. In our opinion, no licensed pilot should ever receive less than $100 for a job requiring a Pilots License, Travel, Camera Equipment and at least an hour of time. Some of the higher end Real Estate work is paying $300-$500, a price that at least pays the basic costs (these jobs require video editing and therefore hours of work. The bottom line here is that many of these low priced jobs went to “kids” and people who are not true businesses…because no business could afford to work for these rates.
The Public and small Contractors have not yet fully caught on in terms of the easy availability of Camera Drones for small and medium sized jobs. Some larger Realtors have an in-house Drone Operator – a similar situation to most of the medium and larger commercial jobs….this effectively takes the independent Licensed Drone Operator out of the equation.
There are solutions to these problems but they are not being addressed as well as they could. For example, if I own a small roofing business and want to learn about drones – what they can do and which one I should buy – EDUCATION – I am pretty much out of luck. What is needed is to take “Drone Tutoring” directly “to the people” on a one-to-one basis. In fact, we have offered the service ourselves and would love to see a nationwide referral network for this type of education – https://www.droneflyers.com/tutor/
Droneflyers.com does not cover the Industrial, Pro Movie and Agricultural Markets – but it is our assumption that these markets are growing because they DO have the educational components in place. From Hollywood to Des Moines, Drones are starting to be put to work and the companies that help make everything run smoothly will be rewarded.
FPV, Racing and DIY
Surprisingly, this segment has been strong with many new products introduced in 2017. FPV models can range in size from tiny (the famous Tiny Whoop) to 250mm or larger. Customers including regular “park flyers” all the way up to the Pros who race in sponsored leagues for year money. Of course, youth and video game experience help if you want to be racing top end models around difficult courses.
FPV and Racing drones are different then “toy grade” since they often feature higher speeds, more solid construction and higher-end goggles.
The DIY market has stabilized as many hobbyists have determined that they are more interested the engineering than they are in taking photos and videos. Serious Pilots like to know how things work, and building and modifying models is a great way to learn what makes a drone fly. Given the current oversupply of drone inventory, DIY’er can find amazing deals (often less than factory cost) on refurb and leftover models and then modify these to meet their needs.
Note: There is some crossover between the various categories – for example, some of the toy models have full FPV and other features that were unavailable just a few years back.
Toy Drones have become a buyers market with literally thousands of units to choose from. The problem is that there are only a very few models worth buying! Many of the companies selling these will be here today, gone tomorrow – meaning they are marketing companies buying models from the same manufacturers – and often pricing the units arbitrability. The same unit can sell for double or triple the price – under a different moniker.
A few toys are starting to add features that bring them into the “hobbyist” market. GPS and Return to Home are two of the desired features…as well as the capability to hold a small sports camera. These will take fine still pictures but are not suitable for video. These models also feature brushless motors which will long outlast the cheap brushed models most of the toys use. A good example of this type of model is the MJX Bugs (w/GPS), which sells for about $200 w/o camera.
Commentary, Summary and what might 2018 Bring
Commercial drone companies going after larger companies, industries and contracts have a chance to make a good business of it. This includes the manufacturers, the app and software providers AND the “folks on the ground” making the sales. These drones will often be operated in house, although the possibility for some long term contracts exist.
However, as mentioned before our “beat” is generally consumer and prosumer drones which are less than $3,000 -akin to personal computers. This market is flattening. I have some guesses as to why and what might be done to improve things……
A Couple Toys and Done?? – Last Christmas I noticed a number of new drone owners flying in the local park. Not so this year. I think the cheap drones have scared a number of people away for two reasons – one, they are much harder to fly….and, secondly, they tend to break down after an hour or two of use (brushless). Many are simply lost in the bushed or trees and that’s the end of that prospective pilot. I’m a stubborn fella – and it took me a lot of “pushing past the BS” to get to a point where both the drones and my knowledge were good enough to enjoy myself and not lose as many machines.
Lack of Beginner Education – you can take fancy courses and get your FAA Certificate – you can learn from the Pro’s how to shoot and edit good video….but there are no services offering basic tutoring and instruction on how to get started flying a drone. I’m talking about “in person” small groups and/or seminars where questions are answered and recommendations are made. I am experimenting myself with doing this for budding pilots and the satisfaction level is high. The problem is that I don’t have enough customers nor the resources to obtain them. I’d love to partner with DJI or another company with a big email lists and gather together maybe 20 tutors nationwide….and give an informal program a try. SO far these companies have focused on higher end education….and acting as if no training or advice is needed to get started. I disagree.
When all is said and done I don’t see 2018 as being a banner year for the standard consumer camera drones. Sure, various units will sell nicely…but it’s also likely one or two companies will give up the ghost (maybe more) due to not having enough unit sales to be profitable.
This article is being written just as CES begins – although we expect some evolution and a lot of hype, the basics expressed above should not change due to the show. We will be sure to update this article if anything shows up which is truly world changing. We will also do an article on CES….although the show has been proven to be more hype than reality. That is, many of the products discussed and shown never hit the market…and even when they do it can be years late!
And so, for now, what we see is what we get.
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