Will Skydio Overtake DJI as the Next Big Drone Manufacturer?

Autonomous drone company making a push to become the top UAV manufacturer.

Without question, DJI products have dominated the global commercial drone industry for years now.

In fact, the company controls between 70% and 80% of the market share and, for several years, it’s faced little competition. With such a high percentage of drones coming from DJI, many manufacturers, namely in the United States, have struggled to remain relevant. The tides of fortune, however, may be changing.

Skydio, an autonomous drone manufacturer, currently recognized as the largest in the United States, may just be poised to dethrone the drone giant in the near future.

Adversity in Recent Years for DJI

In 2017, the United States government began raising concerns over the possibility of “cyber vulnerabilities” with DJI drones.

At that time, numerous military units were using popular DJI platforms, such as the Phantom series. In light of the security concerns, the U.S. Navy released a memo on May 24, 2017, titled “Operation Risks With Regards to DJI Family of Products.

By August, the U.S. Army cited the memo when it banned DJI drone use. And, by May 2018, that ban was enforced across all U.S. military branches.

Military experts cited concerns over the security of the data collected by DJI drones. In their opinion, it was relatively easy to hack into the signal to steal both location and visual information from users.

It was also possible to take control of drones during flights. Fears that hacked drones would expose military strategies rose to the highest levels.

Further issues arose for DJI in December 2020.

The United States Department of Commerce placed DJI on its Entity List. Published by the Bureau of Industry and Security, the list identifies people or businesses which the United States government believes pose a security risk.

The commerce department said their primary reason for adding DJI to the blacklist was due to the company “enabl[ing] wide-scale human rights abuses within China through abusive genetic collection and analysis or high-technology surveillance.”

Now, anyone looking to conduct certain types of business with DJI drones, such as exporting or re-exporting products, must now obtain a license to do so.

However, the list doesn’t make it illegal to purchase or use DJI drones, and the company was quick to point out this fact in their official reply. Per DJI’s response, “DJI is disappointed in the U.S. Department of Commerce’s decision. Customers in America can continue to buy and use DJI products normally.”

Skydio's Opportunity

DJI’s problems have opened the door for other drone manufacturers in the United States.

Perhaps no manufacturer is in a better position to capitalize on the situation than Skydio. Founded in 2014, and based in Redwood City, CA, Skydio designs, builds, and supports its drones domestically. The company is known specifically for its AI-driven engine, Skydio Autonomy™.

Initially, Skydio produced a single drone model, the R1, in 2018. The aircraft was marketed to consumers as the world’s first fully autonomous consumer drone. This breakthrough technology’s commercial success allowed the company to move from the consumer market into more industrial applications.

Over the last few years, the company released its second aircraft, Skydio 2. With even more powerful AI technology, the drone was well suited for industrial inspections as well as consumer applications. Last year, Skydio’s systems design engineer, Joe Enke, joined the Unmanned Uncovered podcast to discuss its development.

 

As the military shied away from DJI, Skydio joined a list of five approved drone manufacturers, along with French manufacturer Parrot, that was approved for military use.

What's Next?

Manufacturers who operate in the United States, and that are already approved for government use, such as Skydio, are already becoming far more attractive to consumers.

In fact, in October 2020, the FAA granted the North Carolina Department of Transportation the first state-wide approval to fly Skydio drones BVLOS for bridge inspections. The groundbreaking waiver is due to reduce taxpayer spend by 75%, and save up to $14,600 per inspection in social disruption cost, just by switching from traditional inspections to drone inspections.

To provide some perspective, NCDOT inspectors are tasked to inspect 13,500 bridges regularly.

If the military’s approval of certain domestically manufactured drones, and the FAA’s granting of a state-wide BVLOS waiver specifically using Skydio’s platforms, is any indication of what is to come, DJI will surely lose market share. The percentage of the market DJI will lose is yet to be seen.

While it’s doubtful that we will see a significant shift overall, but we should expect to see their position erode slightly, as companies like Skydio grow to a much more respectable level.

Regardless of your position on foreign-made UAV security issues, the current developments will be beneficial. With DJI losing some of its hold, more investments will flow into domestic drone companies.

Further investment means a more diverse selection for consumers, increased competition among manufacturers, and overall growth and advancement of the UAV industry.

Will Skydio succeed DJI? Only time will tell.

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David Daly - Contributing Author

David Daly - Contributing Author

David Daly, is an award-winning photographer/writer and licensed (FAA) Commercial sUAS pilot. A graduate of the United States Naval Academy, David is a former Marine Corps officer with a BS in Oceanography and has earned his MBA from the University of Redlands. David has worked for Fortune 100 companies and has a background in aerospace, construction, military/defense, real estate, and technology.

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Secure, but not safe?

The tension between firefighting drones and national drone security regulations.

It’s no secret that North America – and the west coast of the U.S. in particular – has had a particularly bad wildfire season this year.

As of September 29,  70 active fires have burned over 3.9 million acres across the United States, and evacuation orders across the west coast remain in place near 17 large fires.

And that’s just active fires. The US National Interagency Fire Center (NIFC) reports that, to date, there have been 4,091 wildfires which have burned 7.4 million acres across the country.

That’s over 1 million more acres burned than the 10-year average. 

Although the ultimate solution to this problem likely lies in more sustainable housing development, better forest management, power infrastructure upgrades, and other regulatory and business measures, drones can play a critical role in mitigating some of the damage that forest fires cause.

Unfortunately, policymakers and drone operators haven’t yet figured out how to balance national security concerns with an optimally effective fire response.

What are drones doing to help forest fire responses?

Over the years, drones have come to play an important role in the detection, containment, and extinguishing of forest fires, primarily by providing firefighters with accurate data.

Equipped with LiDAR, infrared cameras, and other sensors, drones can map fire-prone areas and, in the event of a fire, capture data on fire spread/speed, heat concentration, smoke, and other variables, all of which can be combined to help predict where a fire will move next.

This helps decision-makers make more strategic choices on firefighting, and evacuation, and other response factors.

Where are they doing this?

All over the West.

But here are some examples:

  • In Colorado, firefighters are using drones to deploy “Dragon Eggs” —  small explosives that combat wildfires by eating up the wildfire’s fuel. 
  • Near the Big Hollow wildfire in Washington, the FAA granted pilots of Verizon subsidiary Skyward, a temporary waiver from September 23 to 25, that allows them to fly the Percepto Sparrow drone from their homes to inspect critical communications infrastructure. The waiver lets them do this 24 hours a day, with less than 3 miles of visibility, and no pilot or observer on site. 
  • The Los Angeles Fire Department has been using drones to go where flame retardant-dropping planes and helicopters can’t go since at least 2017.

So how are regulations getting in the way?

In January this year, the US Department of the Interior (DOI) grounded its 810-drone fleet and stopped procuring Chinese-made drones over concerns that information about critical infrastructure could be leaked to the Chinese government. 

This move was in alignment with the proposed American Security Drone Act of 2020, which seeks to ban federal departments and agencies from purchasing any commercial off-the-shelf drone or small unmanned aircraft system manufactured or assembled in China or other countries identified for national-security concerns. 

It would seem that security comes at a cost, however. An internal memo from the department’s Office of Aviation Services, leaked to The Financial Times, says the decision is hampering the DOI’s ability to fight wildfires.

Although technically DOI still allows its drones to be used for emergency situations like disaster monitoring, the memo suggests that decision has stymied necessary measures that would have equipped the fleet to effectively fight fires.

How so?

According to the memo, by the end of 2020,  the department will only have carried out 28 percent of the controlled burning it could have done had it followed through on its plan to purchase 17 new Ignis systems, which work with heavy-lift machines like DJI’s M600 Matrice and are used to start controlled fires

Without them, the internal memo says the department has had to either use aircraft manned by firefighters — putting lives at risk — or not carried out the burning at all.

“Denying the acquisition of UAS [drone] aerial ignition devices directly transfers risk to firefighters who must use manned aircraft to complete these missions rather than a safer option utilizing UAS,” the memo states.

Will this impact other federal agencies?

Quite possibly.

In letters written in September 2019 and obtained by The New York Times, Stephen L. Censky, the deputy secretary of the Department of Agriculture, told the acting director of the Office of Management and Budget that the agency had major concerns with the law.

Censky wrote that the American Drone Security Act would “severely impact the establishment, development and implementation” of the Agriculture Department’s drone program “to carry out our mission-crucial work.”

Surely there is another side to the story.

Absolutely.

While DJI has decried the move to ban Chinese drones as a “protectionist ploy to exclude successful competitors in favor of domestic suppliers that don’t exist,” and a threat to forest conservation, the decision to ban Chinese-manufactured drones was based on more than protectionism.


Federal officials have been saying that they are worried that DJI drones are sending data back to China as early as 2017, although DJI has firmly denied this accusation. In that same year, the Army banned its employees from using DJI products.

There seems to be a strong, bipartisan belief that the ban is necessary to prevent the Chinese government from seeing what the United States government is seeing through DJI drone flights.

What now?

While it may be too late to turn things around for the wildfires of 2020, if the act makes it through the legislative process, all is not lost for firefighting drone efforts.

On a federal level, it all comes down to whether or not it’s viable to replace the Chinese-manufactured drones in agency fleets with drones manufactured in the U.S. or an allied country.

Currently, the supply chain for materials and components does not support an adequately scaled production of comparable platforms in the United States.

For instance, the California startup, Skydio, makes its drones in the U.S. but still uses some Chinese parts. Its chief executive, Adam Bry, told the New York Times in February that all the core components were American, and that the company was moving away from using the Chinese parts altogether.

Similarly, Paris-based drone manufacturer Parrot is set to release its latest platform, ANAFI USA.

The drone is said to be manufactured in the U.S., and designed with the needs of first responders, firefighters, search-and-rescue teams, security agencies, surveying and inspection professionals, in mind. And, it has a sensor and software ecosystem that features 32x zoom, 4K HDR video, and thermal imaging capabilities. 

On a state and local level, things may be (for the time being at least) simpler.

The American Drone Security Act of 2020 doesn’t seem to prohibit procurement of Chinese-manufactured drones by non-federal agencies, meaning that the L.A. Fire Department, which has a strong working relationship with DJI and was looking to double its fleet of firefighting drones in 2019, will likely be able to carry on with their procurements and possibly use the pending legislation to pressure Chinese manufacturers to take greater measures to assure them of data security. 

Regardless of the fate and implication of the Drone Security Act of 2020, it highlights a tension between safety, security, and affordability, and shows that “drones for good” use cases are the product of difficult decisions and compromise. 

Miriam Hinthorn - Contributing Author

Miriam Hinthorn - Contributing Author

Miriam Hinthorn is an experienced management professional who is currently pursuing her master’s in Data, Economics, and Development Policy at MIT while serving as principal consultant at Consult92.

Miriam developed a love for UAS technology when she served as operations manager at Consortiq. Today, having completed over 30 successful projects in 10 countries, she loves solving a wide variety of logistical, technical, and cultural challenges for her clients so that they can focus on what care about most.

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