Intel’s drone ambition faces uphill battle against DJI

By Li Qiaoyi Source:Global Times Published: 2017/2/19 21:23:39

Illustration: Peter C. Espina/GT

Intel's ambition to continue its dominance over chip technology has largely flopped in the mobile Internet era. However, the US chip giant hasn't remained stagnant but rather has been proactive in exploring other areas of promises. Its effort of diversifying into the fledgling unmanned aerial vehicle (UAV) market seems likely to make the nearly half-century-old company cool again, as 300 Intel drones danced behind Lady Gaga at her buzz-making Super Bowl performance early this month.

Nevertheless, it remains uncertain whether Intel's high-profile drone push will help the chip king of the PC era take on Chinese drone unicorn DJI. That's not to say DJI, referred to as the Apple of the drone world, is unbeatable - in the enterprise drone market in particular - but Intel's drone investments as well as many other drone projects don't appear to make DJI nervous.

Despite Intel's Super Bowl drone fleet, the company's adventure, that included a $60 million investment in Chinese drone maker Yuneec - one of DJI's biggest rivals - in 2015 and the acquisition of German drone maker Ascending Technologies last year, hasn't translated into a substantial dent in the drone market. It remains to be seen whether there will be a resurgence for Intel with either the Yuneec Typhoon H, powered by Intel's RealSense technology inside, or Intel's self-branded drone - the Falcon 8+.

Intel's effort to capture the commercial drone market with the announcement of the Falcon 8+ in October was supposed to put the chip giant in a less crowded arena. But with DJI also moving into the enterprise space, there's no guarantee of success.

As for many drone start-ups, one has to admit that pulling off projects is not as easy as making smartphones or other smart gadgets. Therefore, success stories that proved workable in churning out smart device champions might not necessarily apply to drone manufacturing.

Lily Robotics, the much-hyped drone start-up that was founded in 2013 in Berkeley, California, abruptly shut down in January, following multiple delays in its selfie-taking drone shipping commitment. The start-up admitted in an email to customers that it failed to secure the funding to go into production, although the company said previously it had pulled in $34 million in pre-orders for 60,000 units. Other high-profile drone failures include GoPro's recall of its Karma camera drones in November 16 days after it became available in the market over concerns that the quadcopter could lose power and fall out the sky. Another well-known drone company 3D Robotics has also scrambled to shift to enterprise customers as its consumer business stumbles.

In the latest industry downturn, French drone maker Parrot announced in January that it would be cutting one-third of its drone-related staff.

Chinese smartphone maker Xiaomi also appears to have faltered in its drone venture, with its release of the Mi drone in May 2016 clouded by speculation over the reliability of the UAV which supposedly poses a price challenge for DJI. The Xiaomi drone reportedly crashed down on a live broadcast which the company defended as an outcome of not having noticed a low battery level.

In this regard, DJI's status has been more entrenched and in the consumer drone market, it seems the Shenzhen-based drone manufacturer, a rarely well-recognized Chinese innovator in the tech world, is mostly competing with itself. Although IDC data showed in December that in the third quarter of 2016, DJI posted a decline in the share of China's marketplace for aerial photography drones in terms of shipments for the first time in four consecutive quarters, it still held 51.99 percent of the market, followed by domestic rival Zerotech's 24.3 percent and Parrot's 4.63 percent. DJI's launch of the Mavic, an entirely new product line, at the end of September was believed to dampen the company's drone shipments in the third quarter.

Bearing in mind a general cooling-off in the overall drone arena that seems to have only made DJI fly high above competition, Intel's drone ambition still needs to be fleshed out beyond simply stunning light shows.

The author is a reporter with the Global Times.


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