The term "low-altitude economy" has become a buzzword in 2024. This concept refers to a comprehensive economic model driven by various low-altitude aircraft, which stimulates the integration and development of related fields. Currently, the domestic low-altitude sector primarily focuses on non-controlled airspace below 3,000 meters, involving general helicopters, eVTOLs (electric vertical take-off and landing vehicles), and drones.

In everyday life, the most common encounter for ordinary users is with various consumer-grade drone products. At popular tourist destinations, it's not uncommon to see enthusiasts holding remote controls, launching drones into the sky to capture panoramic views from above. The distinctive "buzzing" sound produced by the high-speed rotation of the drone's propellers is also quite recognizable.

In the consumer drone sector, one brand stands out with a reputation that surpasses this niche market: DJI Innovations. According to the "2023 Global Unicorn 500 Development Report," DJI's valuation has exceeded 150 billion yuan, and it holds over 70% of the market share in the drone industry.

Logically, a market dominated by a single company is not favorable for new brands. However, in 2024, the ongoing popularity of the low-altitude economy concept has prompted many companies to enter or expand their presence in the consumer drone market. Chinese brands, in particular, have leveraged their local supply chain advantages to position DJI, Yuneec, and others at the forefront globally.

How did China manage to turn the tables in the consumer drone sector, going from a late starter to overtaking competitors?

### The "Wild West" Era of Drone Development by Western Brands

Like the internet and GPS, drones initially found their applications in the military sector. As early as the 20th century, military drones had achieved a certain level of development. However, their emergence in the civilian market didn't occur until the 21st century.

Initially, small civilian drones were largely the result of DIY and modification efforts. Enthusiasts tinkered in their home workshops, creating prototypes of quadcopters and multirotor aircraft. They used open-source flight control boards, electronic compasses, barometers, and GPS modules, striving to achieve stable hovering and control in the air.

Many of these individuals are hobbyists passionate about model toys or young innovators from university laboratories. This group of playful enthusiasts became the early pioneers of civilian drones. From today’s perspective, they resemble the artisans of the early digital age, using soldering irons, screws, and circuit boards to fulfill their dreams of flight while laying the groundwork for the future development of consumer drones.

The author has observed that many of the leading figures in the drone industry actually emerged from this group of “geeky flight enthusiasts.” Among them are DJI’s founder Frank Wang (Wang Tao) and 3D Robotics co-founder Chris Anderson, to name a few.

Starting in 2010, consumer drones began to take off. Drone R&D engineer Yu Hang noted, “One of the prerequisites for the explosion of consumer drones was the declining cost of sensors and computing chips. This was largely thanks to the maturity of the smartphone supply chain and advancements in lithium battery technology, which significantly reduced the cost and operational complexity of multi-rotor drones.”

Between 2010 and 2013, as smartphones rapidly evolved, consumer drones transitioned from DIY personal projects to fully assembled products available for sale. Companies like France’s Parrot, the U.S.’s 3D Robotics, and DJI, mentioned earlier, all entered the consumer drone market during this period.

For many domestic users, the first drone they likely heard of was DJI’s Phantom series. However, it was not the world’s first consumer drone. As early as 2010, Parrot released a consumer drone product called the AR.DRONE. At the time, DJI was still focused on the development and optimization of flight control systems.

The first-generation AR.DRONE was never introduced to the domestic market, and its $299 price tag was considered "quite expensive" at the time. To put things into perspective, the starting price of the iPhone 4 series that same year was only $199. Moreover, the product's actual performance was a mixed bag.

A seasoned drone enthusiast, Xiao Xu, who had experience with the product, shared with me: "The AR.DRONE's ability to be controlled via a smartphone or tablet significantly lowered the barrier to entry. This control method is still widely adopted by many drone manufacturers today. However, on the downside, its 12-15 minutes of flight time per charge and weak remote control signal meant it couldn't fly far or high, making it essentially a toy. Coupled with its high price, I only managed to acquire one years later at a scrap price from a European player."

In 2012, the AR.DRONE 2 was introduced to the domestic market. However, what baffled many was that this clearly tech-oriented product, which didn’t fit the profile of a "children's toy," was sold exclusively at Toys "R" Us. Priced at 2,399 RMB, it exceeded the general perception of what a toy at Toys "R" Us should cost and deterred many tech enthusiasts. Additionally, the product offered only marginal improvements over its predecessor.

Looking back at that time, I’d have recommended spending 1,999 RMB on a first-generation Xiaomi smartphone instead. At the very least, the latter had collectible value and came with a free 1,999 RMB Xiaomi gift voucher.

As a professional "veteran flyer" still working in the field, Gao Fu mentioned: "You could say I was one of the earlier individual users in China to get into consumer-grade drones. Around 2015, I started playing with drones. Back then, the domestic drone community was very small, and everyone was figuring things out as they went. Ready-to-fly drones were rare on the market, and even those with some experience in model aviation found it challenging to master drones."

At the same time, apart from Parrot, another company, 3D Robotics, founded in 2009, entered the consumer drone market earlier than DJI. Initially, the company focused on developing open-source flight control systems like ArduPilot, providing hardware and software support for drone enthusiasts and developers.At the end of 2012, 3D Robotics announced plans to launch consumer-grade drone products, subsequently releasing the Iris and Solo models in 2013 and 2015, respectively. In terms of product launch timing, both 3D Robotics and Parrot had a first-mover advantage over DJI. Moreover, 3D Robotics was ahead of its time in many product features, such as one-touch filming and intelligent follow modes, which remain relevant even today.

It’s fair to say that during the "wild west" era of consumer drones, Western companies were the pioneers in this field. From concept development to product commercialization, they moved faster than their Chinese counterparts. Additionally, the Western market was far more receptive to consumer-grade drones compared to China. This is evident in DJI's decision to launch its first-generation Phantom drone in the U.S. market.

### Chinese Companies "Outcompeted" the Rest

However, the aforementioned pioneers of consumer-grade drones have now all but vanished from the scene. The first to fall was 3D Robotics, which announced layoffs in 2016. According to reports from international media, the company burned through $100 million in venture capital before being forced to lay off 150 employees.

In response to rumors of the company’s collapse, CEO Chris Anderson personally stepped forward to clarify. He claimed that 3D Robotics was merely exiting the consumer drone market and would pivot entirely to industrial and commercial drone applications. However, it’s worth noting that 3D Robotics’ social media accounts have been inactive since 2021, and its official website now only sells components for assembling drones.

Next came Parrot, which held on until 2019 before announcing it would cease production of consumer-grade drones and shift its focus to security surveillance, mapping, and agricultural applications. Its most notable product line, the Anafi series, was specifically designed for scenarios like law enforcement and search-and-rescue missions. However, a 2021 market survey revealed that Parrot’s market share in the U.S. had dwindled to just 2.5%, with year-over-year declines.

From 2013 onward, the spotlight in the drone industry shifted to Chinese brands. DJI’s release of the first-generation Phantom drone was a game-changer for the consumer-grade drone market. As mentioned earlier, the Phantom 1 was not even launched in China. DJI understood that the Western market was more receptive to consumer drones at the time, with a higher level of market maturity.

Compared to its competitor at the time, the AR.DRONE 2, DJI's first-generation Phantom drone offered a longer control range, the ability to carry cameras and other accessories, superior flight control technology, and better propulsion systems. It also featured a return-to-home function. Although its price was noticeably higher at $649, it still received a positive response in overseas markets.

Perhaps due to DJI's high profile and dominant market share, many people tend to overlook other Chinese brands that emerged around the same time. After conducting some research, I discovered that DJI is not the only major player from China in the drone industry. Founded in 1999, Yuneec entered the consumer drone market in 2014 with the launch of the Typhoon Q500. Compared to DJI's products at the time, Yuneec's offerings were not significantly behind in terms of product capabilities.

In my analysis, Yuneec's entry into the drone market was largely supported by its prior experience in manufacturing remote-controlled aircraft and fixed-wing electric manned planes. This gave the company a solid foundation in small aircraft technologies. In 2015, Yuneec even secured a $60 million investment from Intel.

Today, Yuneec is somewhat similar to Parrot. While its consumer drone products have little market presence, the company remains active in the small aircraft sector, with most of its revenue coming from commercial and customized drone solutions. According to 2021 survey data, Yuneec held a 2.6% market share in the U.S., ranking among the top three players.

During the same period, other Chinese brands such as Zerotech, XAG, and EHang also emerged in the unmanned aerial vehicle market. However, some of these brands do not focus on consumer-grade products (e.g., XAG), while others have declared bankruptcy and undergone restructuring (e.g., Zerotech). As such, they will not be discussed further in this article.

In my view, DJI's rapid success in the consumer drone market can be attributed to a characteristic often associated with Chinese companies: relentless competition. If DJI's current product updates could be described as "incremental," then its development pace between 2013 and 2016 could only be described as "explosive." During that period, DJI's Phantom series underwent minor updates every six months and major updates every year, setting a blistering pace of innovation in the drone industry.

From the first-generation Phantom to the Phantom 4, DJI has continuously integrated cutting-edge technologies into its drones, including omnidirectional obstacle avoidance and a 1-inch sensor gimbal camera—features that remain at the forefront of drone innovation even today. Beyond the Phantom series, DJI has also expanded into the high-end aerial cinematography market. In November 2014, the company launched the first product in its Inspire series, which featured a foldable design, a built-in gimbal camera, and support for 4K video recording.

What does this signify? Starting in 2015, DJI began updating two consumer drone product lines simultaneously. At the time, most competitors were still operating on a two-year product iteration cycle, while DJI was releasing three to four new products annually. Coupled with its deep expertise in flight control systems and the rapid development of a robust domestic supply chain driven by growing drone demand in China, DJI quickly outpaced its peers in areas such as build quality, feature integration, and signal connectivity stability.

Also in 2015, DJI secured a $75 million investment from Accel Partners, marking the first time the company's valuation reached $10 billion. According to DJI's previous financing materials, the company's revenues for 2014, 2015, 2016, and 2017 were RMB 2.72 billion, RMB 5.98 billion, RMB 9.78 billion, and RMB 17.57 billion, respectively, with annual growth rates of 257.7%, 120%, 63.5%, and 79.6%. Meanwhile, net profits for the same years were RMB 710 million, RMB 1.42 billion, RMB 1.93 billion, and RMB 4.3 billion, with annual growth rates of 200.7%, 99.6%, 35.4%, and 123.2%.

By 2018, DJI had firmly established its dominance in the consumer drone market. Data shows that the company held over 70% of the global drone market share, with its share in the North American market exceeding 80%.

Even so, the number of entrants into the consumer drone sector has not decreased. Notable competitors include Skydio and Autel Robotics, among others. Skydio, in particular, emphasizes that all its drones are designed, programmed, and manufactured in the United States, with intelligent components sourced from American companies—a clear strategy to garner more support from the U.S. government.In November this year, according to a report by the *Financial Times*, Skydio claimed that due to sanctions imposed by China, the company had to ration its drone batteries. Skydio stated that it expects to find a new supplier by spring of next year. Subsequently, there were reports that Skydio had halted production on its drone assembly lines.

Some people say that DJI single-handedly propelled China's drone industry ahead of its U.S. counterpart. While this statement holds some truth, it only tells half the story. From a market perspective, DJI's global market share has indeed left its competitors far behind. In terms of product performance, technological innovation, service ecosystem, and sales network coverage, DJI is undeniably "far ahead." However, this success would not have been possible without the robust supply chain backing it.

In fact, the development and manufacturing of drones involve multiple fields, from the processing of advanced materials like titanium alloys, carbon fiber, and fiberglass, to the production and integration of various sensors and circuit boards, and even to the development of core flight control algorithms and image transmission technologies. As of April 2024, more than 20 companies in the drone and eVTOL (electric vertical takeoff and landing) industries have gone public, and the number of sizable supply chain enterprises exceeds 250.

Jin Wei, Deputy Secretary-General of the China Drone Industry Innovation Alliance, publicly stated this year that China's drone industry is growing rapidly, accounting for over 70% of the global market share.

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### New Drone Regulations Take Effect, DJI Faces Emerging Competitors

In January this year, with the official implementation of the *Civil Unmanned Aircraft Operational Safety Management Rules*, China's drone market entered a new phase of development. I previously published an article titled [“New Drone Regulations Implemented: Stricter Controls as a Double-Edged Sword for Drone Development | TMTPost Focus”](https://www.tmtpost.com/6864666.html), which provided an in-depth analysis of the new regulations, including their interpretation and market impact.

Returning to consumer-grade drones, the gradual refinement of these regulations is actually good news for domestic drone enthusiasts. For businesses, it also presents new opportunities. In 2024, we can expect to see an increasing variety of drones on the market. Beyond traditional drones focused on aerial photography, new categories are emerging as competitive segments, including racing drones designed for high-speed maneuverability and immersive first-person-view experiences, as well as aerial cameras tailored for single-person vlog recording. These innovations are becoming hotly contested areas in the industry.

At the same time, when it comes to drone designs, beyond the traditional vertical takeoff and landing rotor drones, hybrid-wing drones that combine the capabilities of fixed-wing aircraft and vertical takeoff and landing are also becoming a focus for many new brands and products. Ultimately, everyone is trying to avoid directly competing with DJI in the traditional aerial photography drone market.

In fact, DJI’s strength lies not only in the technical expertise and brand recognition mentioned earlier. After speaking with several DJI users, I’ve come to realize a unique demand in the drone market that sets it apart from other consumer electronics sectors: the added importance of after-sales service and cost considerations.

“I became a DJI fan because of their after-sales service,” said Xiao Li, a young professional born in the 1990s and living in Beijing. “The last time I had my DJI drone repaired, it took only four days from sending it in to getting it back. Plus, the repair cost was much lower than I had expected. This was an experience I’d never had with other brands. Since then, I’ve gradually purchased more DJI products, including gimbals, action cameras, and more.”

In my opinion, “service” can be a significant competitive barrier, especially in the drone industry. As aerial vehicles, drones inherently have a higher learning curve for beginners. In industry terms, the likelihood of a beginner “crashing” their drone is quite high. However, compared to cars, smartphones, or home appliances, the relatively niche nature of drones makes it much harder to find local repair services. This is where the density of a service network and the efficiency of after-sales support become critical.

Looking at the distribution of drone brands, most are concentrated in the Guangzhou area. For users in northern regions, this means that repairs often require shipping the drone back to the factory or company headquarters, which alone can take 2–3 days via courier. Moreover, given that drone photography is often used during travel, the ability to complete repairs quickly can mean the difference between continuing to use the drone for creating and documenting content during the trip or facing the inconvenience of cutting the trip short or changing plans. If the repair process takes too long, the travel itinerary specifically chosen for aerial photography might end up being a frustrating misstep.

It’s not hard to understand how DJI has managed to maintain its dominant position in the aerial photography drone market when you consider its unique advantages. Nor is it difficult to grasp the underlying logic behind why other brands are seeking new formats and categories to compete. Take, for example, aerial cameras, which are primarily designed as follow-me tools focused on capturing people. By offering controllable viewing distances, these devices enhance users’ control over the product and their ability to observe their surroundings, thereby reducing the likelihood of accidents.

From the author’s perspective, if we focus on the consumer drone market, there is still room for innovation beyond traditional aerial photography drones. While DJI has secured a leading position, the market remains a “cracked egg,” leaving considerable space for other companies to innovate. By refining specific use cases and exploring new formats, DJI is not an unbeatable competitor.

*(This article was first published on the TMTPost App. Author: Deng Jianyun. Editor: Zhong Yi.)*