future of the drone market

The regulatory curve ball that could massively slow down the drone industry.

2016 was often called the year of the drone by many reporters, tech advocates and news agencies. Many small drone service companies took off the ground, mid-size businesses augmented existing services, and even corporations are now looking to get in the drone game.  However, large companies haven’t quite jumped into the market with both feet… yet. That may all change in February when DJI announces a new industrial drone, the DJI Airworks program, and a strategy for exponential growth.

I have my doubts, all because of a possible regulatory curve ball that could drastically slow down the drone industry.

Many industry advocates understand that in order for the drone industry to retain exponential growth, more industries need to jump on the drone train. The roadblock to many industries’ ability to embrace this technology is that they are unable to acquire data that is precise enough to make a liability based decision. This precision is called regulatory grade data, and has been previously written about by Patrick Egan. DJI is also aware of the regulatory grade data issue. This may explain why we saw the unveiling of the Phantom 4 Pro, so quickly after the release of the phantom 4.

The Phantom 4 Pro’s sensor comes close to providing the resolution necessary for regulatory grade data, but we’re not there yet. DJI is continuing to pursue the industrial and corporate entities by unveiling DJI Airworks. This program is designed to take their aerial platforms beyond just photography and videography, and into the realm of regulatory grade data collection.

Phantom 4 Pro in flight.&nbsp;

Phantom 4 Pro in flight. 


But many people have asked the question, why such a push for regulatory data from DJI? Is it really to garnish more sales, or to create strategic alliances with corporate america?

Whether we’re talking about regulatory grade data, or Real Estate videography, in the eyes of many the FAA is still far behind in creating a viable system that allows for economic development using drones. I recently wrote about this particular issue here.  The emotional connection that drone pilots experience from an aerial perspective has put the FAA in a very interesting position. Why? Because in the U.S. there are currently more registered drones than registered manned aircraft. Yet sales numbers show that the number of registered drones represent just of a quarter of drones sold.  The FAA seems to be behind the regulatory curve, and many operators ignore the “rules” with a perception of immunity. So how will the FAA retain the authority and credibility over the drone industry that seems uncontrollable? By pulling the proverbial carpet out from under the industry.

How could the FAA pull out the rug from under this industry? Actually, what they can do isn’t the issue, it’s who they consult with that raises the possibility of a problem.

Consider this scenario for a moment. If you’re the FAA, who can you recruit to assist in slowing down an industry you feel you’re losing control over? You can recruit Customs and Border Protection (CBP). CBP is the Federal Agency tasked with controlling what is imported and exported into our country. Currently, since drones are categorized as toy aircraft, DJI pays no duty tax on importing drones into the United states, with the potentiality of a 15% parcel tax.

Suppose CBP were to change the categorization of the drones imported into the US? What if CBP created a special categorization for drones? No longer would be the days of Duty Free import to the United States. If CBP were to change drone categorizations, it has the potential to instantly slow down and massively complicate the drone industry.

Will this actually happen, or is it purely speculatory? Only time will tell if this is a reality for the drone industry.

If this change of categorization happens, it could increase the cost per unit for imported drones quite a bit. It would move a DJI Phantom from the toy aircraft category into the Aerial Photography Aircraft (Unmanned), a newly minted classification. This potential change in duty taxes (again, 0%) would cost foreign drone makers (like DJI) just enough in duty fees to make the sales of their product taper off.

So help combat this, it makes sense for DJI to go after those markets that in the past have been hesitant to embrace this technology. With the inclusion of those markets, not only would DJI potentially increase their market share, they would have instant access to the lobbying machines currently in place from those industries.

By creating a drone capable of collecting regulatory grade data, DJI is positioning themselves nicely to take advantage of both the markets themselves, and the political clout that is already in place. Getting those stakeholders on your side is instrumental is continuing to ride the wave that is the burgeoning drone market. And with DJI’s Airworks, that wave doesn’t look to break yet.