5 ms·

The market will open up for new companies after the China ban takes effect. Right now they can't compete.

by cm2012 2y ago

sofixa 2y ago
> Right now they can't compete. Why? Because they aren't good enough, and if they have no competition they'll have to actually do something?
palata 2y ago
That's just an excuse, after 10 years failing to compete. Western drone companies have received billions in investments to make competing drones, but repeatedly fail, for some reason. Western company can't compete, but that's on them. Banning DJI won't change anything, Western companies have to get their act together.
- seanmcdirmid 2y ago
  This isn't really true. Western drone companies haven't bothered competing in the consumer space, but they have made lots of advancement in the non-consumer space, where, arguably, the profits are better. Why try to compete with DJI for mail order drones going to kids when you can get a multi-million dollar contract with the Pentagon?
  - solardev 2y ago
    That didn't use to be true. There was once several Western consumer drone companies (3D Robotics, Parrot, GoPro, Intel, etc.) as recently as the mid-2010s. They gave up on the consumer space because DJI just totally ate their lunch, releasing better, cheaper drones year after year. I still remember how in any given year, the annual DJI drone releases would be smaller, cheaper, better, and fly longer than the other companies' drones (which were always a few years out of date) – AND they would have a whole range of consumer, prosumer, and professional drones and various kits and bundles for every market segment and price point. Nobody else could even remotely keep up. Here's one Western article with some background: https://www.bloomberg.com/news/features/2020-03-26/dji-s-drone-supremacy-comes-at-a-price https://www.bloomberg.com/news/features/2020-03-26/dji-s-dro.... According to it, by 2020, DJI had 80% of the US consumer drone market. It discusses how DJI ruthlessly operated its business and crushed all of its competitors. Even a later startup, founded by Tesla engineers who wanted to build batteries right into the frame, didn't do so well and was soon acquired by another company. It's not that nobody bothered TRYING to compete with DJI. Everyone tried, both in the West and in China itself (e.g. Yuneec, Autel), but DJI beat them all. Their founder is basically the Chinese version of Musk. From that article: > A rather confounding issue Impossible has faced is that the purchase bids put up by police and fire departments often have specifications that guarantee the sales will go to DJI. To illustrate, Gore pulls up a request for proposal for a drone from the Kansas Highway Patrol that lists properties such as flight time, cameras, and payload capacities. The numbers match up exactly with those of DJI’s Matrice 210. “If the U.S. wants to be competitive in robotics and drones, the least it can do to jump-start its own industrial base is to award government contracts to American companies or at least let them compete for them,” Gore says. “There are about 1,000 police departments receiving DHS grant dollars and spending them on Chinese-made, DJI-made drones. We are using our federal dollars to fund what could become one of China’s first prime contractors.” [...] “DJI has incredible lobbyists,” Gore says.
    - seanmcdirmid 2y ago
      They competed until they were undercut, and then just didn't bother pursuing more profitable business instead. That is to say, if you can make a drone for $200, and DJI puts one out for $50, you don't really stand chance, so get out of the way and find more profitable businesses. Anyways, DJI seems to just publish its revenue ($3.83b in 2021) but is it actually making money (profit, not revenue)? I'm not finding anything on Google. If they are selling each drone at a loss and just burning through VC still, that could be a huge problem.
      - palata 2y ago
        > That is to say, if you can make a drone for $200, and DJI puts one out for $50, you don't really stand chance The situation was more that western companies could make a drone for $1000, and DJI would make a significantly better drone for $500. Were they both $1000, the DJI drone would still clearly be better. I am not praising DJI for free here. I just think that we need to face the truth. There is no way to improve with denial.
        ryandrake 2y ago
        It's not like their drones run on Black Magic or Wizardry. Surely someone can just buy that $50 drone, take it apart, see what components they are using and how much their costs are, and start from there?
        palata 2y ago
        Yes, that's what we do! But haven't we been saying this in the West forever: "the Chinese copy: they buy our products, take them apart, and just copy"? Now we realize that they actually learned, and it was not straightforward. They are ahead in robotics, and we can't just "copy": we have to learn. And it takes time.
        seanmcdirmid 2y ago
        It isn’t clear they aren’t taking a loss on each of their drones. If they are, you c ant really copy it at the price point they are selling it for.
  - palata 2y ago
    > Western drone companies haven't bothered competing in the consumer space This is factually wrong. Most drone companies have tried in the consumer space before pivoting towards the military. The military has been more and more present since around 2019, and most Western drone companies have pivoted to the military since Ukraine. Not because it's more profitable, but really because they failed in the consumer space. Also the military makes it easier for Western companies because DJI cannot compete (obviously). But I am absolutely convinced that DJI is better at making military drones ("micro aerial vehicles") than the West.
    - seanmcdirmid 2y ago
      Military is 100x more profitable than consumer. It isn’t clear they DJI is even making money since all I can find on a Google search is them bragging about revenue. If they made $3.83b in revenue in 2021, what were their expenses on that (or better yet, what is the break down of hardware/assembly costs vs. R&D costs if they aren't profitable yet)?
      - palata 2y ago
        You do realize that the Western drone companies are failing at making good military drones, do you? Have you seen what Ukraine had to say about it? I don't even want to talk about DJI not being profitable. That's preposterous. It's like if I was claiming that Apple is state-subsidized and not profitable.
- janalsncm 2y ago
  Frankly, the DoD likely spent something like 5-8 trillion dollars over the last 10 years. If we establish that drone manufacturing is a matter of national security, it seems critically important to understand why domestic production keeps failing and fix those problems rather than just giving up.
  - rchaud 2y ago
    If it's a matter of national security, why would it be made available to the American consumer? They'd have more than enough business from the DoD, and wouldn't have to compete on price.
    - janalsncm 2y ago
      I guess there’s two possibly related questions. One, should military drones be available to consumers and two, why does price matter. On the first, you don’t have to make them available to consumers and probably shouldn’t for the highest end drones. But B2C is a forcing function that pushes costs down. Military budgets aren’t infinite, and better manufacturing techniques mean more drones in a shorter period of time independent of cost.
- tiberious726 2y ago
  I mean... 10 years of not being able to compete with companies subsided with a world powers national treasury isn't really saying much of anything
  - palata 2y ago
    Just have a look at the money VCs and governments have thrown at Western drone companies before claiming it's a money problem.

The market will open up for new companies after the China ban takes effect. Right now they can't compete.

by cm2012 2y ago

The market will open up for new companies after the China ban takes effect. Right now they can't compete.

> Right now they can't compete. Why? Because they aren't good enough, and if they have no competition they'll have to actually do something?

palata 2y ago

That's just an excuse, after 10 years failing to compete. Western drone companies have received billions in investments to make competing drones, but repeatedly fail, for some reason. Western company can't compete, but that's on them. Banning DJI won't change anything, Western companies have to get their act together.

seanmcdirmid 2y ago
This isn't really true. Western drone companies haven't bothered competing in the consumer space, but they have made lots of advancement in the non-consumer space, where, arguably, the profits are better. Why try to compete with DJI for mail order drones going to kids when you can get a multi-million dollar contract with the Pentagon?
- solardev 2y ago
  That didn't use to be true. There was once several Western consumer drone companies (3D Robotics, Parrot, GoPro, Intel, etc.) as recently as the mid-2010s. They gave up on the consumer space because DJI just totally ate their lunch, releasing better, cheaper drones year after year. I still remember how in any given year, the annual DJI drone releases would be smaller, cheaper, better, and fly longer than the other companies' drones (which were always a few years out of date) – AND they would have a whole range of consumer, prosumer, and professional drones and various kits and bundles for every market segment and price point. Nobody else could even remotely keep up. Here's one Western article with some background: https://www.bloomberg.com/news/features/2020-03-26/dji-s-drone-supremacy-comes-at-a-price https://www.bloomberg.com/news/features/2020-03-26/dji-s-dro.... According to it, by 2020, DJI had 80% of the US consumer drone market. It discusses how DJI ruthlessly operated its business and crushed all of its competitors. Even a later startup, founded by Tesla engineers who wanted to build batteries right into the frame, didn't do so well and was soon acquired by another company. It's not that nobody bothered TRYING to compete with DJI. Everyone tried, both in the West and in China itself (e.g. Yuneec, Autel), but DJI beat them all. Their founder is basically the Chinese version of Musk. From that article: > A rather confounding issue Impossible has faced is that the purchase bids put up by police and fire departments often have specifications that guarantee the sales will go to DJI. To illustrate, Gore pulls up a request for proposal for a drone from the Kansas Highway Patrol that lists properties such as flight time, cameras, and payload capacities. The numbers match up exactly with those of DJI’s Matrice 210. “If the U.S. wants to be competitive in robotics and drones, the least it can do to jump-start its own industrial base is to award government contracts to American companies or at least let them compete for them,” Gore says. “There are about 1,000 police departments receiving DHS grant dollars and spending them on Chinese-made, DJI-made drones. We are using our federal dollars to fund what could become one of China’s first prime contractors.” [...] “DJI has incredible lobbyists,” Gore says.
  - seanmcdirmid 2y ago
    They competed until they were undercut, and then just didn't bother pursuing more profitable business instead. That is to say, if you can make a drone for $200, and DJI puts one out for $50, you don't really stand chance, so get out of the way and find more profitable businesses. Anyways, DJI seems to just publish its revenue ($3.83b in 2021) but is it actually making money (profit, not revenue)? I'm not finding anything on Google. If they are selling each drone at a loss and just burning through VC still, that could be a huge problem.
    - palata 2y ago
      > That is to say, if you can make a drone for $200, and DJI puts one out for $50, you don't really stand chance The situation was more that western companies could make a drone for $1000, and DJI would make a significantly better drone for $500. Were they both $1000, the DJI drone would still clearly be better. I am not praising DJI for free here. I just think that we need to face the truth. There is no way to improve with denial.
      - ryandrake 2y ago
        It's not like their drones run on Black Magic or Wizardry. Surely someone can just buy that $50 drone, take it apart, see what components they are using and how much their costs are, and start from there?
        palata 2y ago
        Yes, that's what we do! But haven't we been saying this in the West forever: "the Chinese copy: they buy our products, take them apart, and just copy"? Now we realize that they actually learned, and it was not straightforward. They are ahead in robotics, and we can't just "copy": we have to learn. And it takes time.
        seanmcdirmid 2y ago
        It isn’t clear they aren’t taking a loss on each of their drones. If they are, you c ant really copy it at the price point they are selling it for.
- palata 2y ago
  > Western drone companies haven't bothered competing in the consumer space This is factually wrong. Most drone companies have tried in the consumer space before pivoting towards the military. The military has been more and more present since around 2019, and most Western drone companies have pivoted to the military since Ukraine. Not because it's more profitable, but really because they failed in the consumer space. Also the military makes it easier for Western companies because DJI cannot compete (obviously). But I am absolutely convinced that DJI is better at making military drones ("micro aerial vehicles") than the West.
  - seanmcdirmid 2y ago
    Military is 100x more profitable than consumer. It isn’t clear they DJI is even making money since all I can find on a Google search is them bragging about revenue. If they made $3.83b in revenue in 2021, what were their expenses on that (or better yet, what is the break down of hardware/assembly costs vs. R&D costs if they aren't profitable yet)?
    - palata 2y ago
      You do realize that the Western drone companies are failing at making good military drones, do you? Have you seen what Ukraine had to say about it? I don't even want to talk about DJI not being profitable. That's preposterous. It's like if I was claiming that Apple is state-subsidized and not profitable.
janalsncm 2y ago
Frankly, the DoD likely spent something like 5-8 trillion dollars over the last 10 years. If we establish that drone manufacturing is a matter of national security, it seems critically important to understand why domestic production keeps failing and fix those problems rather than just giving up.
- rchaud 2y ago
  If it's a matter of national security, why would it be made available to the American consumer? They'd have more than enough business from the DoD, and wouldn't have to compete on price.
  - janalsncm 2y ago
    I guess there’s two possibly related questions. One, should military drones be available to consumers and two, why does price matter. On the first, you don’t have to make them available to consumers and probably shouldn’t for the highest end drones. But B2C is a forcing function that pushes costs down. Military budgets aren’t infinite, and better manufacturing techniques mean more drones in a shorter period of time independent of cost.
tiberious726 2y ago
I mean... 10 years of not being able to compete with companies subsided with a world powers national treasury isn't really saying much of anything
- palata 2y ago
  Just have a look at the money VCs and governments have thrown at Western drone companies before claiming it's a money problem.