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China's DJI drones flying high among US companies

  • Author:Harold
  • Source:diecastingpartsupplier.com
  • Release on:2015-04-17

Chinese drone maker SZ DJI Technology Co Ltd has established a strong early lead in the US commercial market as companies turn to its inexpensive, light-weight flying devices for a host of uses from shooting films to mapping and site inspections.

Sixty-one of the 129 companies that received regulatory approval to use unmanned aircraft are using DJI drones, or 47 percent, far ahead of its nearest rival, a Reuters review of federal records as of April 9 shows. Nearly 400 other companies, more than half of the 695 businesses still awaiting approval, have applied to use DJI drones.

Shenzhen-based DJI, whose best-selling Phantom 2 Vision+ drone retails for around $1,200 in the United States, estimates that it already has about 70 percent of the commercial market worldwide and a larger portion of the consumer market.

DJI accounted for about a third of the roughly 50 exemptions granted by the Federal Aviation Administration (FAA) from last September through mid-March. But it has claimed just over half of the 89 exemptions received since then.

Industry experts say basic drones such as DJI's are likely to drive the US commercial market for the foreseeable future, meeting business demand for uses such as aerial photography for site inspections, real estate promotions and video production.

The market for more sophisticated unmanned aerial vehicles (UAVs) is being limited by FAA policy that restricts commercial drone flights to line-of-sight operations at altitudes of 500 feet (152 meters) or less. Those rules are complicating efforts by e-commerce giants Amazon.com and Google Inc to develop high-tech drones capable of delivering packages over long distances.

Founded in 2006 by Chinese entrepreneur Frank Wang, DJI generated nearly $500 million in revenue in 2014, up from $130 million in the prior year.

It expects to exceed $1 billion in sales this year and is in talks with investors to raise new capital. A person familiar with the discussions said DJI, valued at $10 billion, is also pursuing partnerships.

Ease of use

The emergence of a Chinese company as a dominant player in a new US technology market has so far not raised concerns in Congress. Other Chinese technology companies including telecom equipment maker Huawei Technologies Co Ltd have been accused by US lawmakers of posing national security risks, hurting their chances of building a substantial US business.

DJI's US business customers include American International Group Inc, Commonwealth Edison Co in addition to a host of lesser known firms in real estate, insurance, energy, agriculture and film and television.

Due to safety concerns, US companies are banned from using drones unless they obtain an FAA exemption. The US aviation regulator proposed rules in February to lift the ban, but final regulations are not expected until late 2016 or early 2017.

DJI has gained its market lead without a US-based sales staff. Both hobbyists and business customers purchase drones through online retail outlets and directly from DJI's site, and say they stand out for their ease of use as well as the low price.

"Everything just works. A lot of other systems require you to tweak all the settings and parameters," said Paul Callahan, chief executive of New York-based SouthGate Films, which won FAA approval this month to use a DJI drone for aerial photography including solar panel inspections.

Some industry executives say low-end drones like DJI's risk becoming commoditized and that the more promising market lies in high-end services such as thermal imaging and 3D mapping. DJI says it has plans to expand into more sophisticated drones.