Two years ago, I was chatting with a very smart venture capitalist about an investment he was making in the drone industry. The hardware side of the drone business would be quickly commodified, he told me, and the real value would be collected by the software makers who built platforms that were used by a wide range of manufacturers.

This was a reasonable assumption to make if you believed the market for drones would look something like the market for Android smartphones. Dozens of manufacturers would squeeze out small margins while relying on a central operating system whose creator could then monetize that massive install base.

Hardware innovation staves off commodification

The reality today, however, looks a lot more like the other side of the smartphone market: Apple’s hardware empire. And the company positioned to be the Apple of drones is China’s DJI. It has captured more than 50 percent of the market for consumer drone sales in the US, and its biggest American competitors are dropping like flies. That dominance has positioned its hardware as the platform, with every major drone software provider working to integrate their offering with DJI’s mobile app and SDK.

The volume of new product being pushed by DJI is astonishing. It released two drones today, updates to its Phantom and Inspire lines. Last week it released a new version of its Matrice drone, and last month it rolled out an entirely new line of drone, the Mavic. The craziest part about all the new product DJI is pushing is that, by and large, it’s only competing with itself.

DJI has the fat middle of the market all to itself

There are some very high-end drones made by companies like FreeFly and Ascending Technologies that can match the capabilities DJI’s drones offer. But those units sell for more than $15,000, three times the cost of DJI’s new Matrice 600 Pro. Between $1,000 and $6,000 there are now four different kinds of DJI drone, the cheapest of which is better than practically anything else you can get for under six figures.

DJI is now able to slide features from across its various product lines up and down the spectrum. Just like Apple’s fingerprint sensor began on its phone but now lives on its laptops, DJI has taken key pieces of its Phantom line and moved them up to the Inspire and down to the Mavic.

The one place DJI hasn’t gone is down market. It has never introduced a drone that cost less than $999 to start. But the blistering pace with which it’s introducing new product means that its older models, just like last-gen iPhones, can fill in this gap. If someone were to ask me today what the best drone on the market for $500 is, I would say without hesitation it’s the Phantom 3. It’s is a year and half old, but it’s more powerful and reliable than anything else at that price point.

Competition is faltering

Meanwhile the competition is actually shrinking. 3D Robotics, a promising Silicon Valley startup, got out of the consumer drone business after the disastrous launch of the Solo, its DJI Phantom competitor. And GoPro, which seemed poised to shake up the market, was forced to recall its new Karma drone after they started falling out of the sky. The much hyped Lily drone still hasn’t shipped.

China’s Yuneec is one of the last competitors standing. It’s being assisted by Intel, which has given Yuneec both investment and technology. Intel sees drones as a fast-growing market and wants to ensure it has a home for its chips in the coming robot revolution. I would love to see it become the Android of these aircraft, providing a base of software and perhaps core technology that lots of manufacturers could build off of. Right now, however, it’s a more like Windows phones, hardware that could continue to chug along, supported by a corporate parent, but so far hasn’t managed to grab significant market share among consumers.

I don’t think the venture capitalist I spoke to regrets his decision to invest in the software side of drones. The company he backed is doing quite well. But he may experience a twinge of regret that he didn’t pursue the much larger opportunity to invest in an increasingly rare kind of startup, a company that can combine hardware and software into one seamless package, that can appeal to consumer but satisfy professionals, and that seems poised to leave its competition in the dust for years to come.