DJI, which holds a commanding 70 per cent share of the world commercial drone market, is shifting more resources to developing industrial drones as part of a strategy to embrace enterprise customers to offset slowing growth in the broader consumer market.
The Shenzhen-based company sees its latest drones, including the Mavic 2 and Agras MG-1, as being squarely aimed at the industrial segment which accounts for more than half of the global US$9 billion drone market.
“We really found success in the consumer side and are now leveraging what we do very well into other industries. We are expanding to serve different companies, operations and industries globally,” Bill Chen, DJI’s enterprise partnership manager, said in an interview. “One of the key areas for the enterprise business is [the use of drones] in agriculture. As the world’s population keeps growing we have to find more hi-tech ways to meet the rising demand for food.”
The DJI Agras MG-1 octocopter, the flagship of the company’s agricultural fleet, is designed for precision, variable rate application of liquid payloads such as fertilisers and pesticides for spraying crops.
The shift in strategy comes as Chinese tech companies are moving their products and services up the value chain to better compete globally in emerging technologies such as artificial intelligence. Tencent Holdings, the operator of China’s biggest social media platform WeChat, last November signalled its intention to expand into industrial internet applications.
In the consumer market, DJI is still “looking for ways to make drones more accessible [and] whether to increase the battery life or decrease the size,” said Chen. “On enterprise side, we see huge potential demand for drones which have become a kind of mandatory tool” for many industries.
“The growth in China‘s consumer drone market is slowing,” said Pan Xuefei, a drone analyst from research firm IDC. “The enterprise business of using drones to serve companies is expected to have big potential. It will be the major direction in China’s drone industry.”
Annual growth rates in China’s consumer drone market slowed to 73.2 per cent in 2018 from 80.6 per cent the year before, according to IDC.
DJI’s roll-out of a development kit, so software developers can write applications for specific tasks, similar to how Apple supports apps for its iPhone, shows that the drone maker is transforming from a manufacturer to a platform operator.
“Ten years ago we were a tech company that made hardware,” said Chen. “Now we are moving to a platform company, not only providing physical platforms … but also software platforms to [help customers] manage their data analytics. We aim to build versatile platforms that can be addressed by third-party developers as well.”
With the shift to a platform company, privacy will become a particularly thorny issue for DJI. The Chinese tech giant has faced data security concerns as it has expanded globally, with the issue being stoked by escalating China-US tension.
In response, DJI said in an independent study released last year that it verified that its users have control over how their data is collected, stored and transmitted. DJI’s efforts to validate its data security claims come after the US Army banned use of its drones over potential security concerns.