Imagine two drones crashing into each other mid-flight. How cool would that footage be? Now imagine DJI, the Chinese-based company that’s the world’s largest drone seller, on a collision course with GoPro, the American maker of the world’s most popular action cameras. This smashup is going to be even more spectacular to watch.
As recently as last year, DJI and GoPro were helping each other rise to their current heights. DJI encouraged people who bought its drones to use GoPros to shoot aerial footage, and GoPro showcased the most stunning drone videos. In fact, the two were in talks to produce a GoPro-branded drone, according to DJI CEO Frank Wang, but Wang claims that GoPro demanded two-thirds of the profits, and he thought DJI deserved the 2-1 split in its favor. Now DJI is making action cameras, and GoPro is pursuing its own drone.
This friendship turned rivalry is less about the short-term money from a joint venture and more about the long-term profits from owning the platform for a new generation of recreational devices. The consumer drone market is expected to soar from $609 million in 2014 revenue to $4.8 billion by the end of the decade, according to Radiant Insights. DJI, which will reportedly generate close to $1 billion in revenue this year, views drones as the focal point of the skirmish and is working furiously to improve its technology. It has already released three new models within the past year, and in May, it announced a $10 million SkyFund with the VC firm Accel Partners to invest in startups building tools to improve almost every aspect of drones’ reliability and intelligence, from batteries to navigation. A month later, DJI released a new drone that features an automatic obstacle-avoidance system. In that same time, it’s been iterating on its own camera. GoPro, with its first drone slated for release in the first half of 2016, faces the extreme challenge of outdoing what DJI will have on the market—which will be several times better than today’s state of the art.
GoPro is expected to generate more than $1.8 billion in 2015 revenue, and though it may be well behind in creating a drone to rival DJI’s lineup, it has a head start in every other aspect of building out a complete experience. “They have an amazing distribution channel,” says Mike Winn, CEO of software maker DroneDeploy. “Think about how many GoPro endcaps there are [at retail].” And, most crucially, there’s GoPro’s strong brand and user community. GoPro is using these assets to evolve into a media business, with the hardware merely the kindling to ignite users’ ability to create and share videos. In that context, the drone is the ultimate GoPro accessory, albeit one that will be more expensive than a camera. GoPro has made several recent moves—including partnering with YouTube to help creators shoot 360-degree panoramic video and hiring Charlotte Koh, Hulu’s former head of original series, to broker deals with Hollywood studios—that are also all about the content, not the tools.
Even after GoPro releases its drone, DJI will likely continue to dominate that market. DJI may win the air war, but when it comes to the ground game, GoPro remains the one to beat.