Cooling Drone Market Suffers More Layoffs
More bad news for the drone industry as French-based manufacturer Parrot is laying off a third of their drone division. Following a massive drop in fourth-quarter earnings, Parrot said they missed their target by about 100 million euros (~105,000 USD) with their drone revenue generating about 60 million euros between commercial and consumer.
These distressed sales come as a surprise after the healthy reports that drone sales more than doubled since the beginning of 2015. However, even holiday sales couldn't help the Parrot overcome the 50% market stranglehold DJI holds on U.S. sales.
The next eight companies behind DJI combined (including Parrot, Yuneec, and 3D Robotics) only make up 25% of the market.
Drones have seen a lot of up and downs over the past two years. GoPro crashed into the scene with their Karma drone, recalling all of them after a mid-flight power failure had devices falling out of the air. GoPro also lost 200 employees after the recall.
Following suite, Yuneec has received more than $60 million from Intel for their industrial-strength Typhoon H520 that rocks a $4,500 price tag and infrared image capabilities. Expect to see them in use for firefighters and search-and-rescue operations. Intel joins the ranks of a few other major chip makers looking to up the ante in the market, proving there is still profit in the drone market to be made.
I've been calling drones a niche market for a while. I'm always excited to see emerging tech become popular; it is becoming increasingly apparent that sustainable growth in a consumer market is nearly impossible.
The smart move is patience with the cooling market. There is a chance to bounce back, especially with big names like GoPro retooling their Karma drone, but don't count out the otherwise infant market just yet.