Skydio X2 release means more competition for DJI

The announcement by Skydio of two new drones — one for the military and one for enterprise users — has likely raised some eyebrows in the Shenzhen headquarters of drone giant DJI. And it should: This robot has features some serious buyers will undoubtedly want. Let’s take a look at the implications.

There can be no disputing that DJI is far and away the global industry leader for consumer and professional non-military drones.

In fact, it’s more than that: It’s the company that built the industry and has consistently set the pace for features, quality, and technological development. With a global distribution network and at least 14,000 employees – thousands of whom are engineers – DJI makes any other consumer or enterprise drone company on the planet look very small by comparison.

And let’s face it, DJI has earned that spot at the top. It has reliably, year after year, produced affordable products that not only consumers but also industrial clients have come to rely on. In a nutshell, DJI builds good stuff.

A tough company to compete against

And historically, that has made it very difficult for other drone companies to mount any sort of credible threat to DJI’s dominance. They have always been in the position of having to catch up from behind.

Of course, we’re speaking here in generalities. There are many, many drone companies out there that have found strong market segments with specialized products. The Elios 2, for example, does things that DJI products cannot, such as navigating through winding pipes, chimneys, ventilation systems, and more (though it utilizes DJI’s Command & Control system). See for yourself:

Elios isn’t the only player. DJI doesn’t have a fixed-wing Vertical Takeoff and Landing aircraft — a void that opens the doors for products like the Wingtra, the Wingcopter, and even Baltic upstart FixaR — which is just entering the market with its unique Fixed Angle Rotor design. Haven’t heard of these? Take a look: Here’s Wingtra:

And Wingcopter:

And those are just a few of the many fixed-wing VTOLs out there. There are also fixed-wing, long-range drones like the eBee X, featuring resolution down to 1.5 cm accuracy using RTK. There are, too, specialized multi-rotor rigs like the Intel Falcon 8:

You get the point. Many companies already offer niche solutions in specialized areas/applications that seem just beyond DJI’s reach.

And that’s fine. DJI is certainly aware of all of these products. And if DJI determined it was worth its R&D coin to create a competitor for the drone-in-a-ball Elios 2, you can bet it would go ahead and develop something. Who knows? Perhaps engineers in Shenzhen are working on a fixed-wing VTOL right now. Or maybe a sub-aquatic ROV? After all, there’s a niche market there.

Part of DJI’s winning formula

All of this is possible, but somewhat doubtful. DJI has a formula that has worked since its inception: Develop multi-rotor aircraft that works every single time with the features users want and make them reasonably affordable.

It has worked year after year after year. And for DJI, an ever-increasing slice of the global pie has come from its professional/industrial/enterprise models. These have tended to be the choice of First Responders and Search & Rescue units around the world, and the company has invested heavily in expanding and marketing its Enterprise drones, which have become the de facto industry standard.

Think about that for a minute: Nearly every single city or county – even fairly small ones – have fire departments, police departments, paramedics, etc. And increasingly, the trend has been to outfit these units with at least one drone – if not create an entire unit dedicated to using these tools.

Value for money

DJI has long been the tool of choice for these units – offering everything from the Mavic Pro Enterprise right up to the new Matrice M300. And the departments buying these units? They buy them, they say, because they’re the best product they can purchase for the money.

“Currently, there’s not a lot out there that can compare with it [DJI Enterprise products],” summed up Rich Gatanis in an article I wrote for DJI before coming on board at DroneDJ. Gatanis is a firefighter/EMT with Florida’s Southern Manatee Fire and Rescue department.

“Everything that we need, from reliability to price point to quality to how quickly I can get parts – there’s no comparison,” he says.

Data concerns

Recently, however, DJI has been caught up in a controversy not of its making. It’s been suggested that Made-in-China drones (or, indeed, drones not made in the US), could pose data security issues. DJI has gone to great lengths to disprove these allegations and is undoubtedly frustrated this issue is still out there.

But the reality is, that perception has been planted with some people – and other manufacturers see that as an opening in DJI’s armor; a vulnerability to exploit. At least that certainly felt like the case when Parrot recently announced its Anafi USA – a rapidly deployable First Responder drone with thermal, visual, a hermetically sealed data security system, and its Made in the USA heritage. In fact, have a look at the initial communications about the drone launch: It had a decidedly anti-China (and, therefore anti-DJI) feel:

In case that wasn’t clear enough for you…

There were also some allegations made during the launch event that called DJI’s data handling into question (comments that DJI denied).

But Parrot was making a point: ‘We are not afraid to compete directly against you.’ In fact, you could argue the Anafi USA launch and product were the equivalent of a smaller kid at the school throwing a stone at the biggest senior on the playground. Again and again, Parrot emphasized the data integrity of its product as well as its Made in America heritage.

And the new Parrot product? It looks pretty interesting, and will undoubtedly find some clients in North America – clients that would likely have otherwise purchased DJI Enterprise products.

First Parrot, now Skydio

No sooner had the industry absorbed the Parrot launch, when Skydio dropped a bomb on Twitter July 13: It was releasing a new line of drones purpose-built for the military and Enterprise/First Responder users. Though the prices have not been released, the new X2 drones appear to offer very serious features – including 100X digital zoom, a 360-degree view for situational awareness, thermal imaging, and the ability to autonomously scan structures into 3D models. In a word, it’s impressive.

Plus, AI and $100M

We haven’t had our hands on a Skydio X2 series drone yet. But the products truly do look amazing, providing the commercial version is competitively priced. Based on the retail of the Skydio 2, we’re willing to bet that price will be competitive. But here’s the thing: Skydio has already built a rock star reputation out of its AI software. The ability of Skydio drones to track like they have an actual brain is amazing – and where DJI could still use improvement. On top of that, it’s a US-based company, which is another feather in its cap. And – oh yeah – it also just raised $100 million in a Series C funding round.

Pay attention, DJI

Let’s recap. For years, DJI has enjoyed having the market pretty much to itself. In fact, some estimates suggest the company has 77% of the US market for drones locked up. In addition, DJI has been expanding its Enterprise market by launching new products and continuing a significant commitment to R&D. Now, in the space of two weeks, two different competitors have announced new products that compete directly with some of DJI’s Enterprise line.

DJI will have no choice but to pay attention to these recent developments. They are a signal that other companies are growing – both in technology and in confidence. And these companies are now stating they’re willing to take DJI on in this sector.

If there are two companies now, there will be more a year from now. And DJI, which has always been highly competitive, scrappy – and sometimes even a bit paranoid when it comes to other drones it thinks might take market share – will have to adjust to the changing landscape.

But it will. It may be a giant, but it’s a fairly agile one. And you can bet, somewhere in Shenzhen today, they were talking about next steps.

What do you think about these developments – and how do you predict DJI might react? Have your say in the comments below, and follow author Scott Simmie on Twitter here.