#049 – Drone Industry Review: Q2 2017

In Podcast by Ian Smith


Drone Industry Review is a special, quarterly podcast series brought to you by Commercial Drones FM. It briefs listeners on the most important and newsworthy happenings from the previous quarter in the drone industry. Covered topics include drone hardware, software, regulations, funding, M&A, delivery drones, and how drones affected various industries in that quarter. This is the second episode in this series where we conduct the Drone Industry Review of Q2 2017.

Click to download the free eBook for Q2’s Drone Industry Review.

Missed Q1’s Drone Industry Review? Click here to listen.

Intro

Hey everyone, Ian here and welcome to CDFM!

This episode is the 2nd in our new, recurring series of episodes called “Drone Industry Review”.

This series feeds you all the biggest news from the drone industry, in the past 3 months, in just 20 minutes or less.

The objective and format of this series is to brief you on all of the most important, news-worthy items that have happened in the world of drones in the past quarter.

Everything from hardware to software—regulations, mergers and acquisitions, delivery drones, entertainment drones, and more will be covered.

This quarter we have 10 different topics to cover. If there’s a topic that was in last quarter’s episode and didn’t make it into this episode, it’s likely just because I determined there was nothing noteworthy to report.

So, are you ready? Here’s your drone industry review for Q2, 2017.
Let’s kick it off first with hardware…

 

Hardware (~5 min)

Multirotors are up first.
The Chinese drone OEM DJI had a veritable *monster* of a Q2 this year.

Early on in the quarter, DJI released the Phantom 4 Advanced, which is essentially a Phantom 4 Pro but with only the front-facing obstacle avoidance sensors.

Then, DJI teamed up with Seagate, the popular digital storage manufacturer, to release a hard drive optimized for drones.

The DJI Goggles (a head-mounted wearable) were made available for pre-sale, starting at $449. They’re compatible with Mavic Pro, Phantom 4, and Inspire platforms.

The company also announced the totally badass-looking “Cendence” modular remote control, meant for aerial videographers and high-end commercial operators. It’s compatible with the Inspire 2 and Matrice 200 and costs a whopping $999.

Then, DJI controversially broadcasted their intention of requiring users to update their drones to the latest firmware which requires a drone operator to sign-in and verify their DJI GO account before use. If users don’t do it, certain drone functionality will be crippled.

DJI Spark drones are now loose in the wild—they’re tiny, cost $499, and have an integrated 2-axis gimbal. They’re targeted at hobbyists.

All of this happened amongst chatter that DJI’s revenue exceeded $1.45 billion, up 60 percent year over year. Between 2011 and 2015, DJI’s revenue has reportedly increased 100-fold.

And finally, a paradigm shift that seems like not many besides myself have caught and analyzed. DJI has added IAPs to their DJI GS Pro software. Starting at 99 cents for just 60-minutes of access, commercial drone operators can pay to unlock 3D Map POI waypoint functionality for vertical asset inspections. For $19.99 you can get lifetime access. So, micro-transactions to unlock additional flight functions… could this be just an experiment or is this a hint at what’s to come from DJI?

Alright, enough of the DJI show. Let’s move on.

Intel had what I’m referring to as their official coming out party for their commercial drone activities. Even though nearly every single DJI drone sold already has an Intel-owned Movidius computer vision chip inside of it, Intel has even more grand plans to infiltrate the commercial drone market.

This coming out party culminated as Intel showcased how their systematic approach to owning the full-stack of drone hardware and software is leading to big technology advances. In front of thousands of attendees, CEO Brian Krzanich took the stage at AUVSI’s XPONENTIAL conference and displayed a live, indoor, fully-autonomous drone inspection taking place on a fake bridge with their Falcon 8 drone platform. Big things are coming from the legacy Silicon Valley company.

And another spectacular thing seen live by thousands? A GoPro Karma drone crashing at the San Francisco Giants baseball stadium, narrowly missing hitting, sitting spectators in the stands.

Yuneec Aviation has seen better days. Reports on the internet showed images of angry Yuneec suppliers picketing outside of Yuneec properties in China, demanding that the company’s debts be paid.

Aeryon labs announced Bill McHale will be their new CEO, while the incumbent will take over as the high-end multirotor OEM’s first Chief Technology Officer. The company was also named as one of Canada’s best places to work.

A company called Elistair announced a product called “Ligh-T”, a tethered power-system that’s compatible with DJI Inspire 1 drones.

A super heavy-lift multirotor has been released by Griff Aviation and debuted at the XPONENTIAL conference. The prototype platform can lift “hundreds of pounds” and the company is working on a larger unit that can carry nearly a ton. Griff Aviation will also open up a Florida-based manufacturing plant.

Moving on to fixed-wing news.
Delair-Tech, my alma mater, completed France’s first 30-mile, BVLOS flight over a 3G network and became the country’s official national provider for fixed-wing drones for government. Congrats, guys.

Parrot-owned senseFly reached a global distribution agreement with software company Airware and launched their corridor mapping solution, targeted at linear infrastructure inspection.

Parrot themselves then launched some professional solutions, likely hoping to do for fixed-wing what DJI did for multirotors. Their solutions are based on their lower-than-eBee-costing Disco drone platform. This is more of a prosumer fixed-wing play, something new to the market which I hope can gain some traction as fixed-wing platforms just haven’t had nearly as much momentum as their multirotor constituents.

In GPS news, Swift Navigation publicized a partnership with Carnegie Robotics which brings a new product called, Duro, which is essentially a ruggedized version of of their flagship Piksi multi dual-frequency RTK GNSS receiver.

Moving on to VTOL—still no products that are crazy successful here.
A company called Wingtra has a small VTOL platform capable of mapping missions.

Swift Engineering, not the aforementioned Swift Navigation, launched a VTOL platform called the “020” that looks larger, yet a bit more fragile, than Wingtra’s platform.

In the world of sensor manufacturers, Sentera introduced a multispectral, double-4K sensor and from what I understand, is the first of its kind, offering nearly double the resolution to its direct competitors.

Hasselblad and DJI launched the world’s first 100-million-pixel drone, based on the Matrice 600 and Hasselblad’s H6D-100c camera.

In battery technology, we see the first DJI spinoff. Ex-DJI employees created a company called EcoFlow and its first product, an external battery called, River, to quote The Verge, “is a big ass battery pack that you didn’t know you needed.”
And a Chinese manufacturer MMC announced the HyDrone 1800, a hydrogen fuel cell-powered multirotor, capable of 4 hours of endurance.

 

Software (~3 min)

Through various not-very-cryptic-at-all tweets, Skycatch looks to be not necessarily *pivoting* but rather, adding a new focus to their commercial drone software offerings. There have been videos of new artificial intelligence algorithms running in real-time on a drone, tracking objects on construction sites.

Of course, this is all happening on-board a new piece of drone hardware from the company—a quadcopter dubbed, “Explore 1” which looks to be a DJI Matrice 100 with a Swift Navigation GPS unit and an NVIDIA computer vision chip (possibly the Jetson) onboard.

For the past few months I’ve been trying to schedule a podcast with CEO Christian Sanz but unfortunately scheduling conflicts keep arising. I’ll get you more information on this development as soon as I can. Mr. Sanz, get at me.

Airmap has integrated the new UAS facility maps into their software. These facility maps depict the areas around 268 airports in the U.S. where drones may be authorized to operate.

DroneDeploy released Fieldscanner, new technology that lets drone users create real-time previews of the areas they’re trying to create maps of, viewable on a mobile device, without an internet connection. I was actually able to donate my vocal chords to the righteous promo video: [insert clip].

Kespry added a few new executives at the VP level to their team. Of note is one, Jim Allison, who is now Kespry’s VP of Engineering and previously was VP of Product Development at Lily Robotics—yes, that Lily Robotics, the one whose headquarters was raided and was then subsequently sued in a consumer protection lawsuit by San Francisco’s district attorney.

Even after recently auctioning off all of its assets for $750,000, Lily Robotics has only been able to repay about half of the 61,450 customers who pre-ordered the fraudulent company’s drone. The saga continues.

Airware’s founder and CEO, Jonathan Downey, resigned and handed the Chief Executive Officer reigns over to Airware’s now-former COO, Yvonne Wassenaar. With this, there is now officially a trend with drone companies replacing their founding CEOs—PrecisionHawk, Kespry, Airware, and Aeryon.

Dronebase, the marketplace which connects commercial drone operators to clients, closed two big partnerships in Q2: one with RE/MAX and the other with Getty Images. They’re continuing to construct a valuable ecosystem for drone operators and in my eyes, are clearly leading the pack.

The Serbian agricultural analytics company, AgriSens, have changed their name. They’re now known as Agremo.

And CopterSafe, a Russian company, is selling software mods that essentially jailbreak DJI drones, allowing their customers to bypass DJI’s own geofencing and restricted flight areas. Obviously, this modification can be used for nefarious purposes but here’s to hoping something positive comes of this.

 

Regulations (~2 min)

The European Union is hoping to have unified drone rules in place by 2019 while in the U.S., the Department of Transportation began an audit on the FAA to investigate their waiver process.

Drone maker DJI quietly made large areas of Iraq and Syria no fly zones—an attempt to combat the unintended ways in which their drones are being used—but obviously not if CopterSafe has anything to say about that.

And how about a Part 107 drone pilot update? As of late March to around May, over 39,000 Remote Pilot Certificates were issued in total and Part 107 knowledge exam average pass rate is 92%.

There were also a reported 810,000 UAS registrations. That’s four fifths of one million!

But… after an appeals court decision in May, the FAA’s requirement to register hobbyist drones was struck down. So, individuals are in the process of getting their $5 refund and continuing to fight the man.

Assuming the absolute minimal majority of the 810k registrations were for hobbyists (an insanely conservative estimate), we get 413,100 hobbyist registrations. At $5 a pop, that equates to a potential $2+ million hit in hobby drone registration refunds for the FAA to process.

Trump! What’s Trump up to in the drone world? Well, he met with some industry stakeholders at the White House and somewhat awkwardly fondled a drone. Official word from the White House is that no drones were flown inside. Thank you for that reassurance.

Although, if there were a rogue drone buzzing about the premises, the Trump administration’s new proposal could allow the feds to track, commandeer, disable, hack, or destroy drones flying in the U.S. And as April Glaser of Recode points out, that would potentially mean that drones may have less privacy protection than a cellphone, which currently cannot be searched without a warrant.

 

Shake-ups, Funding, and M&A (~2 min)

3D Robotics raised a $53 million series D round. This tallies up to $178MM in total funding to-date. The round included investments from the Autodesk Forge Fund and others.

Echodyne, a radar company with a drone focus, closed a series B round of $29 million. Bill Gates was one of the investors who participated.

Swift Navigation, the GPS and navigation company, raised $34 million for autonomous vehicle GPS.

Drone Racing League, the one with an ESPN partnership, raised $20 million in a series B round.

And American Robotics closed $1.1 million in seed funding to develop automated drone technology for farmers.

Airbus, the Toulouse, France-based airplane, helicopter, and satellite manufacturing behemoth, officially announced the creation of Airbus Aerial at XPONENTIAL. Airbus Aerial is their own commercial drone service play. As mentioned in last quarter’s episode, It’s led by Jesse Kallman, and has attracted the likes of ex-Google X legal counsel, Travis Mason to join the crew. They’re based in Atlanta, Georgia and are currently recruiting heavily for software-related roles.

Snap, the “camera” company who reportedly has a valuation higher than SpaceX, acquired unknown drone startup Ctrl Me Robotics for a cool million many months ago. I’m not even going to begin to speculate here but no concrete evidence of Snap drone development has been revealed.

A drone conference called “Ascend”, which was to be put on in Oregon by one of the print publishers who make the magazine Drone360, closed down shop without ever even opening, citing unsatisfactory attendee registrations and lack of exhibitor commitment. Probably a good thing.

 

Autonomy and Flying cars (~1 min)

Dubai’s autonomous aerial taxi service will apparently be ready for takeoff later this year. After scrapping the overhyped Ehang passenger drone (which never seemed viable to me in the first place), they’re now locked in with German aviation company, Volocopter, who produce a much more realistic passenger drone than Ehang’s publicity stunt.

Kitty Hawk, a “flying car” company, purportedly backed directly by Google’s Larry Page, began testing its Wrightly-named, Flyer (ha-ha) in public over the San Francisco Bay. It’s basically a motorcycle drone… or a jet ski that’s a drone… or whatever they decide to spin it as. With a potential endurance of around 20 minutes and range of 50 miles, it’s incredibly exciting to imagine the future of personal air transportation.

 

Delivery Drones (~2 min)

Of all companies, IBM has submitted a drone delivery patent.

Team Roadrunner set a new record for longest urban drone package delivery in the U.S. at over 97-miles using cellular connectivity.

Amazon is opening a new research facility for its drone delivery aspirations, again, outside of the U.S., near Paris, France.

Amazon also snagged a patent for a shipping label with a parachute built in, intended for “packages to be dropped from an aerial vehicle, which land at their destination without damage.”

AND Amazon has filed another patent for a cone-shaped, robotic fulfillment center.

A Beijing-based Chinese e-commerce company, JD.com, is developing delivery drones which can carry one ton. How much does Chinese soup weigh?

The company said it made its first deliveries with smaller drones to customers back in November. They already have a nationwide network of delivery stations with 235 million regular companies.

Google’s Project Wing made progress for unmanned air traffic management by completing a series of tests organized in conjunction with the FAA and NASA. A small step forward for feasibility of actual drone delivery.

 

Internet-beaming drones (~1 min)

Facebook’s internet-beaming drone, Aquila, has completed its first successful landing, compared to other test flights where it wasn’t quite as pretty.

And an incredibly useful report was released by Qualcomm which chronicles “…results of the first comprehensive, systematic study of cellular system performance in networks serving low-altitudes, below 400 feet AGL.”

The takeaway? After 1,000 flights, even though LTE antennas are aimed down toward our cell phones on the ground, “…signal strengths were statistically stronger for drones at altitude than for ground vehicles because the free space conditions at altitude more than made up for the antenna gain reductions.”

Verizon might finally be closer to actually selling those drone data plans they announced last year.

 

Entertainment drones (~1 min)

Attendees at the popular Coachella music festival in California were witness to 300 of Intel’s Shooting Star drones which performed spectacular light shows in the night sky.

Japanese mobile phone operator NTT Docomo debuted what it’s calling the world’s first spherical drone display, transforming a normal-ish multirotor drone into a flying, glowing likeness of planet Earth.

 

Mining (~1 min)

Luck Stone, the United State’s largest, private aggregate producer partnered with Airware to better utilize drones in mines and quarries.

 

Public safety / SAR (~1 min)

Public safety and search and rescue comprise one of the fastest growing verticals in drone use, with buckets of mentions over the past 9 months.

Just to call out one of these mentions, park rangers in the Grand Canyon used drones for the first time to assist in a search-and-rescue mission. The park’s fleet of drones help searchers look in tight spaces without sending rescuers into a potentially unsafe situation.

 

Outro

And that’s it. In less than 20 minutes, Q2 2017 of the drone industry is in the books. I hope you enjoyed this episode, we’ll release the next one in October of 2017.

Be sure to check out past episodes of CDFM on the website at commercialdrones.fm or wherever you get your podcasts from.

If you want to support the podcast head to http://patreon.com/dronespodcast (that’s P-A-T-R-E-O-N…) and see how just $1/mo can keep this show going and get you access to the exclusive, CDFM, supporters-only Facebook group. Hope to see you there.

Alright, let’s cut off the mics. Cheers.