In speaking with people throughout the industry over the past year there is one opinion that seems to be universally shared regarding drones in the marketplace — “It’s early.” This is one way of saying, “we have no idea where things are going or when they are going to get there.” But things did happen (or didn’t). Here is a review.
What we saw and learned in 2016
US firms cannot successfully bring drones to market. GoPro is the poster child for this. A publicly traded company that pioneered innovative technology to capture action sports. It stumbled terribly in bringing the Karma to market. Seeing its unique selling proposition being eclipsed by the emergence of consumer drones from DJI, Parrot, and Yuneec; GoPro attempted a response built on and around its core product the GoPro Hero. It was a sound strategy but GoPro didn’t execute. As of this post, the Karma is still unavailable. Another consumer drone that couldn’t get its air legs was the Lily. It had a sensational marketing campaign. And it too was a pioneer – at least conceptually. The Lily would be a low end GoPro that could take action shots and selfies. But it is yet to make it to consumers. And the interim has seen products like the Yuneec Breeze and ZEROTECH’S DOBBY enter its space. As a last example, there is 3DR, a veteran in the drone space. It pivoted for the third time. The firm started as a DIY drone firm for enthusiasts, it then went into the high end consumer space with a great drone, the Solo. However, manufacturing was a challenge. Earlier this year, Anderson announced they were pivoting again. 3DR is now focused on the commercial market and be addressing it as much through software (with help from Autodesk). They are going to need some luck. There are some very strong players in the commercial drone software space.
DroneDeploy, Kespry, and PrecisionHawk are just three firms that are looking to dominate the market for capturing, analyzing, and reporting on data captured by drones. While they have had their genesis in different industries (DroneDeploy and PrecisionHawk started in agriculture, Kespry in mining and construction) they are all looking to have their solutions apply to multiple commercial markets.
There are two firms that significantly pushed the drone envelope. One is a technology giant and wants to remain so; the other wants to become one. Intel is investing entering the drone space in a big way essentially through acquisitions and consistent with heritage, namely, being the brains inside. Intel has achieved a number of things this past year. It released a drone under its own name through its acquisition of the German firm, Ascending Technologies. But more importantly, it was behind one of the more significant drone developments of the year: a drone’s ability to avoid obstacles while in flight. Intel’s RealSense was integrated into Yuneec’s Typhoon H. But it didn’t end there. It also acquired Movidius, the firm that developed the sensors enabling obstacle avoidance in DJI’s Phantom 4. The capabilities are a little shaky but the promise is there. This technology will be a key dimension in allowing for safer flights which segues to our last observation of the year.
As surprising as it may sound, the agency drone operators love to hate (though few will admit it), the FAA, made progress! Part 107 was a significant advance in the permitting and regulation of drones or UAS as the FAA prefers to refer to them. Was it enough? No; but it did crack the door to more expansive commercial adoption of drone technology by small and medium sized firms. Let’s hope for “beyond visual line of sight” regs as well as night flights.
So what is ahead?
Let’s start where we just ended. It is critical that the FAA continue its efforts in drone regulation is a sustained and productive way. The lack of clear regulations around specific environments (urban areas, rural areas etc) and specific concerns (privacy) is allowing states municipalities, and (God help us) other federal agencies such as the FCC to get into the regulation space. This will not be helpful.
In our opinion the regulatory environment will continue to be fluid and a bit of a mess. The FAA’s mission is safety. The drone industry’s mission is revenue. Hopefully the FAA will put the necessary resources against furthering regulation while factoring balanced input from the industry. The industry leaders need to remember that it is the industry they are looking to grow not their own firm. There are some very big players working with federal officials (e.g. Amazon, Intel) on Unmanned Traffic Management (UTM). Looking for input from firms other than the gorillas would be prudent.
This might also involve inviting in companies not grown here. Namely, the Asian firms that are dominating the hardware market. DJI is a player. They are cementing their position in multiple markets and we don’t see them backing off. They may become the standard. Regardless, standards are to be wished for in 2017. Across the board the industry and consumers would benefit from standards in terms of performance (flight times etc) for specific purposes, as well as standards of operation and interface. We would like to see DJI and Yuneec as members of the Small UAV Coalition.
Two drone developments we want (and expect) to see advance in 2017 are better object avoidance and smarter, more sophisticated geofencing.
These two developments will contribute to primary wish for 2017 – safe ease of use. As one industry executive commented at the recent Drone World Expo show in San Jose, “It needs to be so simple that I forget it is there.”
A flexible more comprehensive regulatory environment and technology that leads to better ease of use will advance the market and the industry. This is a year in which progress will be made.