This the 3rd installment of a 5 part series on the essential history, products, and competitive trends that are driving the explosive growth in the commercial drone industry. Its content recently won the prestigious Quora knowledge prize and has contributed to articles from Forbes to CNBC.

Enough with drone history, what about the future?!

Well, to talk about the future, let’s start with the present and project forward.

DJI and the continued dominance of the Phantom

DJI has great flying cameras that outperform and undercut every other photo/video drone. This is why even heavily venture-backed and high performing companies like 3DR have struggled immensely when competing with DJI’s hardware.

What’s in store for 2016 then? First off, it’s not the Phantom X. I view this purely as a market research study to test by means of public comment if DJI should invest in Lily Drone-like features and technologies. I’ll go into detail on these when covering Lily in the final post.

DJI will continue to improve its breadwinning photo/video products, the Phantom and Inspire series, while further testing the waters in other areas. With the Phantom 4 DJI has re-upped their commitment to autonomous, intelligent, and robust drone systems by placing an emphasis on obstacle avoidance and a user experience that is focused around the user's mobile device instead of the sticks and buttons on the controller. We will go into detail here when discussing Yuneec in the next post. DJI is exploring agriculture hardware with the Agras MG-1 as well as R&D hardware with the Martice M-100 and guidance kits for advanced computer vision. However, the prime directive is still to deliver increasingly better products for creative aerial imaging. So far we have only seen one investment from the DJI/Accel Partner’s Sky Fund in DroneBase, an aerial imaging services marketplace. In contrast, DJI’s largest investment was purchasing a minority stake in Hasselbald (a centuries-old Swedish camera maker); their priorities for high-quality imaging hardware seem clear. This makes sense as nearly ALL of the money being made in drones today comes from photo/video drone hardware sales. Often overlooked in DJI’s growing video empire is the Osmo, which is defining and driving the handheld steadicam market, a big hint that DJI may not be a one trick pony that struck gold with the Phantom. The Osmo was extremely well received by Vloggers and other online content creators who make up one of the fastest growing areas of photo/video. The Osmo could also be a major player the next progression of action camera technology as we reach the limits of digital image stabilization.

DJI continues to champion risk and innovation in their R&D and product design. Over the summer, they opened an R&D center in Palo Alto headed by Apple's previous director of antenna design and Tesla’s previous director of autopilot design. Perhaps the most important DJI initiative that will influence 2016 is their quickly expanding mobile SDK. A robust SDK will allow DJI’s flagship products to truly become platforms for mobile software. In this way, the past competitive dynamics of the cell phone market will shape those of the consumer drone market: high quality and standardized hardware will enable cost-effective applications for every use case. This, mixed with favorable regulation and better safety/ATC systems (DJI also picked up the guy that build Uber’s public policy team from scratch), is what the collective startup that is consumer drones needs to continue growing. Without them, there is no definitive reason that drones will be guaranteed to become mainstream in the next 5-10 years.

A make or break year for 3DR

The Solo drones’ 4 smart shots and GoPro compatibility were not a strong enough product differentiator for large adoption in 2015, despite excellent marketing.

Considering the poor GPS performance, gimbal shipment delays of almost 4 months, and the $1800 total price tag, the Solo needed to display earth-shattering performance or assisted piloting / smart shot features that 10x’ed the market.

However, the poor GPS performance nullified the small value added by the smart shots, which quickly became a standard adopted by competitors (DJI, Parrot, Yuneec, EHang, and Hexo+).

So going back to my final point on DJI, I would like to see 3DR abandon the Solo to focus their efforts on standardized, market-leading flight computers and open source software like the immensely valuable DroneCode and DroneKit projects. With their simple, market-leading, and beautiful products, as well as their expansive but closed-source SDK, DJI is truly stepping up as the Apple of consumer drones. 3DR is then the best positioned and most capable player to rise as the Android analogue. I strongly believe it will be nearly impossible for them to compete with DJI on hardware, but they can dominate software, which history has consistently shown to be the winning bet in the Silicon Valley.

But this is all just my opinion. The reality is 3DR's major pivot has been a recent downsizing (Chris Anderson's somber letter to employees) and new laser focus on enterprise drone systems. This was an impressive launch and 3DR showed their resilience with the announcement of 2 exceptionally renowned partners, Autodesk and Sony. However, at $3,249 for the hardware, $499 monthly for the software license, and $99 per month for success services 3DR will need to execute perfectly on their first mover advantage, create an effective and sticky service, and hire one hell of a sales team. If they don't, all DJI needs to do is slightly shift some efforts to making products enterprise ready/integrated and buy up one of the emerging enterprise drone startups (my favorite and #1 prediction for the next big drone industry acquisition is PreNav, they're pretty awesome).

But if 3DR can't directly go head to head with DJI, can anyone? What technical innovations will pick the winner and losers for 2016? Check out part 4 to see Yuneec and Intel's bold approach to taking on the king.

Next up in this series - Part 4: Yuneec: A Dark Horse The Drone Industry Cannot Ignore

Other posts in this series:

Part 1: The Expert’s Guide to Drones: What You Need To Know for 2016

Part 2: Making the $8B King of Drones

Part 5: Will The Lily Drone Meet Customer's Expectations?

ABOUT THE AUTHOR:

Andy Putch is the co-founder of FreeSkies, a Bay Area software startup that is building the future of the drone UI/UX. Before FreeSkies, he was an autonomous systems researcher with the University of Illinois Bretl Research Group exploring emerging SLAM (LSD-SLAM) and other GPS-denied UAS control systems. He has also worked as an aerospace and defense corporate strategy consultant with Renaissance Strategic Advisors and as a NASA Aeronautics Academy Fellow at the Armstrong Flight Research Center. Andy is a private pilot, Section 333 exempt UAS operator, and featured speaker at several drone conferences and trade shows.