Introduction
Now, fears of Chinese espionage have forced some drone operators to switch to American-produced models and away from leading Chinese companies like DJI, which owns over 70 % of the market share worldwide.
These government bans in Florida, they’re not just impacting first responders, police and firemen, they’re also impacting people, working universities.
So university researchers and there’s a lot of scientific research done with small drones. Dji claims that its drones are secure and points to security evaluations as proof that some US-Critics’ Concerns are overblown.
Und state and local government entities have spent millions on DJI drones, meaning that moving to a US-produced option could be both expensive and wasteful of previous purchases.
The US Government has these Approval Lists or mechanisms for approving drone manufacturers.
Und even during the recent attacks by Hamas in Israel, drones were used to give the attackers an advantage.
Now we have small drones that you can buy for a few hundred dollars or $1,000, taking over many of the tactical air-combat-roles that we saw manned aircraft performing.
Und although the US arguably pioneered the use of drones in a military capacity, they are usually larger, more expensive and not as easily replaced, compared with the churn of consumer drones being used by both sides of the Ukraine-Russia conflict.
So some militaries use our products, but more for disaster relief or civilian-type operations that we see, is a valid use-case.
But we do not want our products used within combat. Drones of many makes and models are being used in Ukraine, from small, handmade first-person-view-drones to large, heavy-drones, normally associated with filmmaking and other enterprise-work.
So what we’re seeing right now is Ukraine is consuming about 10 000 drones a month. Chinese companies such as DJI and others have a large lead on cost-effective and capable drones.
But some in the US think this dynamic is not permanent. There’s been this question, you know, different people have different perspectives on this of like:
Can a US company compete? Like, are we going to be able to match the drones that are coming out of China?
I think it is going to be key that US-produced drones or drones produced by trusted allies become more affordable.
The drone king
The size of the global consumer drone market is around $4.1 billion, and in the US alone, it’s a little more than $1.
1 billion. And the Chinese drone maker DJI owns more than 70 % of the global market. Dji Drones range from cheap to expensive, depending on the model and features.
They’re known for being well made, and they come with great support in the form of DJI Care.
We’re clearly the number one manufacturer of civilian drones, right? So both for the consumer segment and for the enterprise or business segment, we are clear leaders by a very, very wide margin.
Eventually DJI was able to take advantage of the fact that they obviously are located in Shenzhen, very close to a lot of electronics, and they also make genuinely quite high quality products.
They’re inexpensive, they’re easy to use. They’re reliable increasingly so. Since 2016. Dji pioneered small drone technology in the mid-2000, and their drones continue to be very capable for the cost.
Das erste Mover-Advantage really helped create DJI as it is today, in a commitment to innovation.
Surprisingly enough, people kind of counterintuitively assume that this cheaper Chinese product is going to be less reliable.
But in this case, it’s often not true. There’s also some market incentives that have existed around why we don’t have a really good Western or European competitor in this particular cheap civilian drone market.
China’s Ministry of Commerce has recently released export restrictions on certain drones, such as those with long flight times or certain sensors.
Diese effectively limits the sale of these products to enterprise-customers. The China Export Restrictions.
Das ist really focused on trying to ensure that drones not being used for combat use and DJI builds civilian products.
Several states in the US have moved to ban the use of DJI-Drones by state-agencies such as Police-Departments oder Fire-Departments wegen Data-Concerns
Und a federal ban has been floated by several senators that would restrict federal agencies from using Chinese-produced drones.
It’s genuinely worrying that we’ve reached a point where people kind of win an argument just by naming China.
People are not looking at the facts as we would want them to. The facts around DJI are that we’ve been audited by the US Government.
We’ve had other companies come in and audit our products as well for Cybersecurity and there’s been no threat identified.
Made in America?
The problem with making small consumer drones like Quadcopters in America is that the price of producing them goes up, because material and labor costs, among other things, are higher than in China.
Around 2017, 2016, a lot of the Western competitors dropped out of the market. They didn’t want to compete.
They also didn’t make some great choices sometimes. Und even if a drone is made in America, making one out of parts solely sourced in the US is quite difficult.
But we’ve got to create the conditions where US companies can win these contracts, particularly when it comes to government-provision of drones, local law-enforcement-procedures, drones, and even in our national critical infrastructure, the companies that operate in and maintain our electrical-power-grids, our transportation systems.
I mean, DJI. Is a very impressive hardware company in many dimensions. They’ve been at it for a while.
They make really sleek, integrated systems. Our basic outlook on the market is that it’s still very early days.
Skydio recently moved to focus on the enterprise market, and they hope that artificial intelligence can be a game changer in who can operate small drones.
The opportunity that we see and that many of our customers see is much broader deployment, much more impact.
Und really giving a drone to everybody who could benefit from one, not just everybody who happens to be an expert pilot.
Our products are definitely more expensive. I mean, our cost structure is quite a bit higher than our peers coming from China, which is why we’ve chosen to compete on the basis of having a product that’s got kind of a different value proposition based on AI.
Police Drones
Around 2017 again, law enforcement began buying huge numbers of drones and they started buying a lot of drones made by DJI.
While some Police and First Responders use DJI Drones, US-based companies have also been creating drones marketed towards law enforcement, firefighters and other government organizations.
Law enforcement uses them for things like surveillance, for search and rescue, for things like monitoring protests.
Of course, during the very controversial COVID-19 law enforcement used drones to monitor public movements.
I think, when you talk about the non-military or non-law-enforcement application of drones, there’s no immediate threat to using Chinese components.
But what we have to prepare for is, if there is a conflict with China down the road and they cut off that flow of components, then the law enforcement and military application of drones in America could be curtailed.
My name is Blake Resnick. I’m the founder and CEO of Brinc Drones. We basically build public safety technology.
Brink Drones recently signed a deal to send several drones to the New York City Police Department.
Drones aren’t anything new to the New York City Police Department, but their use has only increased as the technology has become more ubiquitous.
The impact is already super positive. I think the potential impact of the story, everywhere it is, could be much, much greater.
There are certainly valid concerns. We don’t want to live in a world where we’re all being sort of proactively randomly surveilled from the air.
War Drones
People weren’t sure about the military efficacy of small and micro drones. We are seeing it in spades on a daily basis in the Ukraine-Russia conflict.
The US Department of Defense recently announced an initiative called Replicator, which, among other things, aims to field thousands of small drones in a fairly short timeframe.
I think this is a sign of a lot of really forward-leaning, sharp folks in the US government and the US DOD seeing the trends and seeing that small, light, survivable systems that are smart enough to do useful things on the battlefield are crucial for the future of our military might and making investments in that direction,
We do not have the drone-factories right now to produce these systems in those quantities. They just don’t exist.
Und we also don’t have all of the requisite supply chain components that we would need in order to scale up to that production.
The US is just behind in this technology, and I think it’s going to take Replicator, but frankly a lot more than Replicator, to actually fix this problem. Learning how to stop small drones could be just as important for US national security.
Fortem Technologies aims to field sensors and a drone hunter that can help defend against small drone threats. I think it’s just really important to understand that these drone-threats have become a key part of any modern conflict.
Und for both sides of that conflict they are indispensable tools for intelligence, surveillance, reconnaissance, targeting.
And without them, I think it would be difficult to to win these modern warfare. So it’s, it’s a real part of our modern threat profile, both domestically and in warzones.
What’s next?
It’s not great, that we’ve only got one company.“ The less you know, it obviously is very politically relevant.
If Replicator replicates a commercial procurement model, I think we’re going to be in great shape.
If it replicates the traditional military procurement model, nothing will fail here. It will eventually become a high-cost, low-productivity-event.
What we’ve seen early on in the history of the drone industry is widespread consumer adoption.
So people basically buying flying cameras, and that’s been great. But I think really the future of this industry is autonomous.
That’s that’s really where all of this is going. Any attempts to ban DJI are really not just damaging DJI, but damaging the entire ecosystem around drones. So there’s a lot at stake here.
So we need to think about that and to not be to drive an overreliance on Chinese components. As we move ahead, the.
The larger the scale we reach, the more leverage we get and the more we can lower our costs. And there’s very much a virtuous cycle there.
So I don’t think it’s an impossible mountain to climb. It is a mountain, but we’re we’re going up it.
