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Tencent millet joins the group drone to usher in the era of bloody
In 2016, the Chinese drone market entered a phase of intense competition and transformation. Xiao Wan, vice president of Xiaomi, announced on Weibo that the company’s spring 2016 product launch event would take place on February 24. The event will feature two ecosystem products—drones and smartwatches—launched alongside the Xiaomi 5 smartphone. According to reports from the South China Morning Post, Xiaomi's upcoming drone is not targeting the high-end market but instead aims to capture consumers with its cost-effective performance, priced around 1,000 yuan.
At the opening day of CES 2016, Tencent partnered with Zero-Intelligence to officially unveil the YING drone, powered by Qualcomm's Snapdragon flight platform. Industry experts expect this drone to transition from traditional aerial applications to consumer-focused uses such as travel photography, event recording, and more. It is anticipated to be available to customers in the first half of 2016.
After years of rapid development, the Chinese drone market now has over 400 companies, accounting for more than 70% of the global market share. Among them, "Southern Xinjiang (innovation)" and "Northern Zero (Intelligent Control)" have emerged as leading players. With the entry of big names like Tencent and Xiaomi, many industry insiders believe the market has reached a stage of “consolidation,†where the landscape is expected to change significantly within the next few years.
Meanwhile, the "unicorn" Dajiang Innovation (DJI) continues to dominate the sector. In early 2016, Lufthansa signed a collaboration agreement with DJI to jointly develop drone technology. The partnership includes sharing of drones, aerial cameras, and developer platforms. DJI has also formed alliances with major companies such as Airbus, Panasonic, Ford, and NBA. With products ranging from 2,500 to 7,500 yuan, DJI has become one of the most valuable companies in the drone industry, achieving $1 billion in revenue in 2015 and an external valuation of $10 billion.
Another key player, Zero-Intelligence, joined forces with Tencent to launch the YING drone at CES 2016. The collaboration involves Zero-Intelligence handling product R&D, manufacturing, and logistics, while Tencent focuses on marketing and distribution strategies. This strategic alliance highlights the growing trend of tech giants entering the drone space.
Xiaomi also made moves in the drone market by collaborating with Guangzhou Feimi Electronic Technology. Between May and June 2015, the two companies jointly applied for 23 invention patents and 4 utility model patents related to aircraft design, control systems, propellers, and tripods. Xiaomi invested in Feimi, which handles drone design and production, while Xiaomi takes charge of marketing and sales.
Industry experts suggest that the entry of strong players will lead to a multi-polar competitive landscape in the Chinese drone market. However, the rising costs of R&D and manufacturing have made it increasingly difficult for new startups to enter. Skye Drone founder Gui Xiaoying noted that starting a drone business is extremely challenging due to the dominance of established players like DJI and Intelligent Control, as well as the involvement of large corporations.
Wang Pengwei, chairman of Guorun Investment, emphasized that capital investment in the UAV field has become more cautious. Many startups lack the technical strength to attract investors, and the best opportunities are already being snapped up. Analysts recommend focusing on niche markets such as logistics and agricultural drones, where demand is growing rapidly. With favorable policies in place, the agricultural plant protection drone sector is expected to see significant growth in 2016.
As the market becomes more saturated, the future of the drone industry looks both promising and highly competitive, with only the strongest players likely to thrive.