Why China Is Emerging as a Tech Superpower to Rival the U.S.
By
CLAY CHANDLER
November 21, 2017
A dogfight in the world of drones was about to begin. It was November 2016, and Da-Jiang Innovations Science and Technology, better known as DJI, was preparing to launch its killer new product: the Mavic Pro. Weighing just 1.6 pounds, the Mavic was compact enough to fit into a book bag and featured a four-mile flight range and a built-in camera capable of shooting pin-sharp 4K video from hundreds of feet up. Though priced below $1,000, the Mavic sported sophisticated gimbals to stabilize the camera and cutting-edge software enabling it to lock on subjects and follow them around, detect and avoid midair obstacles, and automatically return to its launch point before running out of power.
The executives at DJI knew they had a great product. But would it sell? DJI had little brand recognition even in China, and Mavic was its first product for mainstream consumers. Moreover, DJI was up against a formidable roster of U.S. and European competitors flocking to market with similar devices—including Parrot, a 22-year-old French electronics manufacturer; Lily Robotics, a Silicon Valley startup that raised $15 million on Kickstarter; and GoPro, the maker of portable action cameras. How would DJI’s technology fare vs. the best in the West?
It wasn’t even a close contest.
DJI president Roger Luo says he knew immediately they had a winner—and a huge production challenge. Within three days of release, DJI had received three times more orders for the Mavic than it had expected to sell the entire month.
Meanwhile, the drone contenders from the West fell back to earth one by one. Parrot was the first to surrender, announcing in January it was axing workers from its drone division. Then Lily revealed that, despite collecting more than $34 million in preorders, it had burned through all its cash and would close without shipping a single unit. The real surprise was GoPro. The San Mateo, Calif., company had established its brand by selling more than 20 million “wearable” cameras. And CEO Nick Woodman had vowed GoPro would
return to profitability with the release of a heavily marketed drone called Karma. But the Karma, it turns out, was bad—heavier and slower than its Chinese rival, and lacking its tracking or detect-and-avoid capabilities. Worse, the first Karmas had an alarming tendency to lose power and drop from the sky. After an embarrassing recall, GoPro relaunched in February. By then, DJI had taken off.
Fast-forward to today, and
DJI controls more than 70% of the commercial drone market, a category that could soar to $15 billion by 2022, according to global research firm Interact Analysis, up from $1.3 billion last year. With venture funding from Accel Partners and Sequoia Capital, DJI has a valuation of $10 billion. The company doesn’t disclose financial results, but it has been widely estimated by analysts that sales this year will exceed $1.5 billion, with earnings approaching $500 million. ...
