First Click: DJI helps China pivot from global copycat to tech innovator

September 28th, 2016


Verge reporter Ben Popper describing the rise of DJI in his report from China yesterday:

"In early 2012, DJI released the Flamewheel, its first drone frame. The unit was meant for serious hobbyists, and came as a bare piece of metal to which you could add your choice of parts. Much assembly was required. Then, in December of 2012, DJI released the Phantom, and everything changed. The company was so used to operating in the background that the first Phantom didn’t carry DJI’s brand, save for a small, removable sticker. But the product quickly blossomed into a massive hit.

"They kind of reinvented the whole industry with that," says Michael Blades, a drone industry analyst with Frost and Sullivan. The Phantom was powerful enough to appeal to professionals, but simple enough for beginners. It had serious range and stability, but required no assembly out of the box. "That really bridged the gap between a toy and tool," says Blades. In the four years since, DJI has emerged as the clear industry leader. "They became the 800-pound gorilla.""

Reading this, I was struck by how easily you could replace "Flamewheel" with "Apple I," and "Phantom" with "Apple II," and you’d be describing the beginnings of one of the most famous innovation stories in US history. But DJI isn’t based in the US — it’s a technology company based in China, and that should worry Silicon Valley.

DJI isn’t just a drone company, it’s the drone company. If you’ve got the cash, you start by looking at DJI and then work your way down a growing list of Chinese quadcopter makers. GoPro entered the drone market last week with the announcement of its foldable Karma. The great US hope inexplicably failed, however, to include two features any thrill-seeking GoPro fan requires: collision avoidance and follow-me. DJI’s brand-new Mavic Pro delivers those missing features and then some for roughly the same price as the Karma, including new hands-free gesture controls that let you wave your arms to get the drone’s attention and then signal it to follow you. What could be better for the self-obsessed snowboarders, surfers, or mountain bikers that dominate GoPro advertising?

I shouldn’t be too hard on GoPro. After all, it’s a newcomer to flight — unlike another US drone maker, 3D Robotics. Like DJI, 3DR grew out of the DIY drone scene popular with hobbyists and aerial cinema pros. It even hired Colin Guinn, former head of DJI North America. 3DR’s Solo drone looked like a strong competitor to the DJI Phantom when it launched last year. Unfortunately, the company ran into manufacturing and supply chain issues that crippled delivery. 3DR has since turned its back on consumer drones in order to focus on enterprise applications, causing it to shed a number of employees in the process. Colin Guinn left 3DR earlier this month.

DJI’s class-leading machine vision technology is provided by Movidius, soon to be a new division of Intel. So at least the Valley is represented by having its silicon inside some of China’s most advanced drones. But the code enabling Mavic’s advanced flight capabilities is developed in-house by DJI. Intel is also a major investor in Yuneec — DJI’s chief competitor. In April, DJI filed a patent lawsuit against China-based Yuneec, leading some to speculate that DJI will look elsewhere for its Vision Processing Unit chips after the Intel acquisition was announced three weeks ago (DJI’s new Mavic Pro uses Movidius’ latest VPU).

In the 2000s, China was notorious for producing a glut of cheap gadget clones of absurd quality and laughable branding like "Nokla" and "iPhonc." Back in the day when most of The Verge's founders wrote for Engadget, we ran a series called Keepin' It Real Fake, or KIRF. Almost without exception those brazen knock-offs were of Chinese origin. "They can copy fast, but they can’t innovate," went the refrain.

DJI is no KIRF. Far from it, and probably the most highly visible exception that China has yet to produce. DJI’s innovations are most visible at the product level, but they can also be seen in manufacturing, retail, and the customer experience. I’d wager it’s only the point of a spear headed right for the heart of Silicon Valley. And if DJI is the tip, then companies like Oppo, Xiaomi, Vivo, and Huawei form the shaft that will quickly follow.

But really, after outsourcing the world’s high-tech manufacturing and engineering jobs to Shenzhen for more than a decade, how can anyone feign surprise?

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