New Oppenheimer report on the drone market. (Nobody knows how big it is)

Oppenheimer, a Wall Street research firm, has just released a very good report on the current state and prospects for the drone market. One thing they point out is how all over the place most estimates of the market size are (see above). 

Here's another estimate, by the Consumer Technology Association (formerly the Consumer Electronics Association).  That's the one that feels most accurate to me. 

Views: 2197

Comment by Darius Jack on February 18, 2016 at 7:02pm

Global drone markets are fully saturated.

Mini drones are highly expensive as a one time toy.

Buyers buy $100 camera mini drones.

Drone registration, drone regulations closed interest in drones radically.

Every day 100 drone crashes are reported.

Potential buyers await safe, crash proof mini fullHd camera drones for hobby use at $200 with 30 minutes flight time.

What comes next is real drone evolution known from a market of smartphones.

Today you buy 3G, GPS, 5M camera smartphones at $100 and there is low interest to pay $101.

To boost sales DJI has to cut price by half, otherwise business can collapse soon.

Mini drone is no more hot item.

Comment by Jack Crossfire on February 19, 2016 at 12:57am

With negative interest rates coming, valuations should become unlimited even with no sales.


Moderator
Comment by Gary Mortimer on February 19, 2016 at 4:21am
Comment by Thomas Stone on February 19, 2016 at 4:49am

@Gary

Up and to the right. Board meeting gold. :)

But seriously, great market info. Thanks.. 

Comment by Acorn on February 19, 2016 at 1:42pm
If I read between the lines, is FAA hinting at something here after 2016?
Comment by Craig Issod on February 20, 2016 at 8:16pm

I helped CTA a bit this year after their ridiculously low earlier predictions. Still, they are interested in toys so you have to dig into the numbers deeply if you want to know the metric we (presumably) care about. After all, I doubt many of us care how many $13 nano drones are sold.

Specifically, CTA said "According to CEA projections, the U.S. market will approach $105 million in revenue in 2015 (increasing by more than 52 percent from 2014) with unit sales expected to approach 700,000, an increase of 63 percent."

Only 105 Million in 2015 in the USA?

It's not rocket science to approximate what sales were in 2015. To wit:

DJI probably has 80% of the USA consumer market for 1K quads. They had claimed targets of 1 million drones worldwide with 30-35% in the USA. Even if they didn't meet those target, they would easily have 250K+ units sold here.

So,

250K DJI - at $700 realized revenue each = 175 Million

50K 3DR, Yuneec, Walkers at $700 revenue each = 35 Million

50K Parrot at $300 avg revenue to Parrot = 15 Million (only includes BeBop and AR Drone)

20K misc FreeX, Large Brushless Chinese models, etc. at $200 revenue each - 4 Million

---------------

$229 Million on the low end realized to the manufacturers

By the charts above it seems CTA has changed their number from the 105 to closer to 300 Million.

However, it seems to me that the 2016 number is WAY high as we are in the midst of a "dot drone" bust that most within the industry know - but few seem to be talking about. It's not good marketing to talk about downturns and plateaus but we are most certainly in one.  

I'd be surprised if 2016 unit shipments of $500-$2,000 USA drones were up 30% over 2015, let alone 115%. 

The dot-drone bust is caused by a couple factors - first, the pioneers in the market already have a drone - and with the newer P3 models, the drone is "good enough" that they are not salivating to replace it with the next big thing. Then we have the negative press and the FAA. The FAA (reportedly with the agreement of the industry players who were on their committee) picked the absolute WORSE time to throw out a bunch of press about drones - and the registration regs. If they would have waited until Feb. 1 or held off until this new micro exemption became law, the air would not have been let out of the balloon.

IMHO, anyway. I think it will eventually all settle out. But the bodies (so to speak) are piling up while that happens. 

Comment by Colin Snow on April 2, 2016 at 12:48pm

I looked at the CTA data and projections also.  Our survey research show DJI with only a 50% U.S. market share (all price points) and 67% share in the $1000 - $2000 range.  We'll be showing much of our analysis at the Drone Dealer Expo.


Moderator
Comment by Gary Mortimer on April 2, 2016 at 12:57pm

Oh the Expo that ripped off Patrick dodgy fellows from the start ;-) DJI certainly does not have the 70-80% that the press trot out. They might get there as sub 2kg becomes a thing.

Comment by Craig Issod on April 2, 2016 at 1:20pm

Those numbers seem a lot closer - hard to ever give the overall market without cutting out those toys - even single bladed helis inside the round globe (popular toy) may be counted as drones??

The actual definition of consumer drones....and the various price categories need to be defined using the real world sales. For example, $1K to 2K may have meant something a year or more ago, but today it's $450-$1500 which emcompasses the vast percentage of camera drones. That's the problem with data being so dynamic - by the time we understand and report it it's out of date!

My "rule of thumb" puts DJI at about 75% in that 500-1500 range, which probably agrees with your survey other than the differing categories. Only a small percentage of consumer electronic (flying camera drone) buyers are going to spend 2K...or even $1500+.

The Wirecutter did a survey 9 months ago which showed 3/4 of their readers (fairly high end, high tech) would only consider a drone costing under 1250. That is trailing (time) data and prices have come down, we might guess that 15% or less would consider $1500 plus (base price). Of course, that 15% is representing more and more people due to some growth of the $500+ end of things.

Also, "killer apps" like computer vision and much better cameras may help part customers with more money....

Hopefully you will share that data after the DDE. 

Amazon sales ranking - in the $300+ category (this even includes discounted Bebop) is a good quick look IMHO. Right now the only models in the top 20 - or anywhere near there - are 4 DJI Phantoms.

http://www.amazon.com/gp/bestsellers/toys-and-games/11608080011/ref...

A couple Phantoms even make it to the top 100 in Camera Photo and Video - putting them into the same sales volume as the GoPro Hero 4 Black.

I'll be interested to see what actual models the survey shows are selling in 1K+ and whether that agrees with the Amazon stuff.

Then there is the question of Market Share in numbers sold? Or in total dollars of revenue per unit added up?

Comment by Olivier on April 2, 2016 at 1:52pm

Good to see you here, Colin, a welcome impassionate voice in the sea of noise. And all too common amateur armchair analysis including guessed statistics through anecdotal pickings.

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