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China’s tighter drone rules send enthusiasts flocking to school

September 4, 2017 - 9:35pm

(Reuters) — A buzz fills the sky above a flight base in northern Beijing, as pilots practise take-offs and landings ahead of tests to qualify for a license – to fly drones.

Drone enthusiasts in China, the world’s top maker of consumer unmanned aerial vehicles (UAVs), are scrambling for licenses after the government adopted strict rules this year to tackle incidents of drones straying into aircraft flight paths.

“A drone is not a toy,” said Yang Nuo, the principal of the drone training school in the Chinese capital, who expects more students to sign up in a drive to boost flying skills. “It involves complicated aerial theoretical knowledge.”

Gao Huiqiang, 32, said his construction company told him to seek a license.

“Since the laws on drones are tightening and a legal framework is being built, they told me to come and get the license first,” he added.

In June, China set an end-August deadline for owners of civilian drones to register crafts up to a certain weight under their real names. Last week, a test-flight base opened in the commercial hub of Shanghai, which requires civilian drones to fly below 150 m (492 ft), the official news agency’s Xinhuanet website said.

Others have balked at the idea of spending around 10,000 yuan ($1,534) for an official qualification, particularly as uncertainty surrounds future regulations.

“They don’t know when the next regulation will be introduced,” said Hao Jiale, the manager at a DJI drone store. “Some people want to wait and see.”

Privately-held SZ DJI Technology Co Ltd, based in the southeastern city of Shenzen, had a roughly 70 percent share of the global commercial and consumer drone market, according to a 2016 estimate by Goldman Sachs and Oppenheimer analysts.

Despite the curbs, prospects for growth look bright.

China’s camera drone market will see a compound annual growth rate of 68 percent in five years, with shipments reaching 3 million units by 2019, up from 40,000 in the third quarter of 2015, tech research firm IDC said last year.

More than 120,000 drones have been registered in China, Xinhuanet said, compared to just 77,000 registered users in the United States.

Tech tourism: Proposed Cupertino hotel may include skydeck with ‘unparalleled views of Apple Park’

September 1, 2017 - 6:47am

As construction on Apple Park has progressed, the best views have been delivered by pesky drone operators — despite the company’s attempts to halt the practice. But even if the drones are shut down, a hotel company is hoping to capitalize on interest in the new corporate campus.

Kimco Realty has submitted plans to the City of Cupertino to build a 185-room, five-story boutique hotel on the west side of Apple Park. The hotel would be just south of a shopping area known as Cupertino Village.

“The hotel is designed to create an attractive new gateway into the City of Cupertino, and to complement the iconic Apple Park facility located directly across Wolfe Road,” the company wrote in its proposal.

But to capitalize even more on the public’s curiosity about the new corporate HQ, the proposal notes: “Kimco is also investigating the feasibility of including a viewing platform or rooftop lounge, which could offer the community another gathering spot and unparalleled views of Apple Park.”

Except for planes and drones, views of Apple Park will remain limited, as far as the general public is concerned. Apple itself is building a visitor center across the street from Apple Park (on the east side). This will include a rooftop terrace that allows the public to see part of the main building. But while the main building is an estimated 48 feet high, the visitors’ center will only be 23 feet high.

The Kimco hotel would be 60 feet in height, which means its rooftop terrace would offer better views of Apple Park than the visitors’ center, though it’s hardly the birds-eye view we get from drones.

It will be interesting to see if Apple weighs in. After all, it designed the campus to offer a high degree of security and privacy to employees. A gaggle of tourists sipping cocktails and gazing down on Apple Park may not thrill the tech giant.

The proposal is in the early stages and faces many months of scrutiny before it can be approved.

DJI reveals a new drone, a facelift, and ‘sphere mode’ at IFA 2017

August 31, 2017 - 8:15am

High-end drone company DJI has revealed two products at IFA 2017 in Berlin today. But it is the addition of a new “sphere mode” for the current Spark drone that has (ahem) sparked interest.

First up is a new and improved Mavic Pro Platinum, which DJI says is quieter than the previous model, as well as offering a longer flight time. Eleven percent longer, in fact, which takes it up to 30 minutes per flight.

The increased flight time comes courtesy of new electronic speed controllers and redesigned propellers. Otherwise, it is very much the same Mavic Pro you’ve seen flying above your back yard.

The Phantom 4 Pro Obsidian is less exciting since it is effectively the Phantom 4 Pro in a different livery. DJI describes this as “a sleek matte-gray Obsidian color shell featuring a magnesium, electroplated and anti-fingerprint coated gimbal, which requires a higher standard manufacturing technique.” I call it “gray.”

The new “sphere mode” announced today — coming to the Spark drone — is set to offer a new way of sharing drone-created content. Spark pilots (yes — I called them pilots) can now produce a panoramic photo that features a fisheye lens effect. The resulting “sphere” can be shared directly to social media sites, where viewers can interact with the output — assuming the social network supports interactive images.

While the new mode isn’t necessarily groundbreaking, it is — by definition — revolutionary. Just not that kind of revolution.

You can soon expect your Facebook timeline to be chock-full of interactive panoramas, thanks to your DJI-toting friends. The new feature will be included in the forthcoming DJI GO 4 mobile app and via Spark firmware updates.

With a retail price of £1,119/€1,299/$1,099 the Mavic Pro Platinum is available for preorder immediately at DJI’s website and will begin shipping in September. The Phantom 4 Pro Obsidian will retail for £1,589/€1,699/$1,499 and will also be available in September at DJI’s website and at DJI Flagship Stores, as well as through authorized dealers worldwide.

Despite crackdown, there’s a new Apple Park drone video

August 17, 2017 - 9:26am

A new drone video shows work continuing on Apple Park, including progress on landscaping, despite reports that the company was attempting to prevent such flyovers.

Over the summer, several drone operators said that Apple had hired security guards for adjacent sites to warn them not to fly their drones over the company’s new headquarters. At the time, it did not appear Apple Park had been declared a no-fly zone by the Federal Aviation Administration. Still, some drone operators who had been posting construction progress videos said they would stop.

But today, Matthew Roberts of Maverick Media posted a new video update:

The video doesn’t look remarkably different from others shot in recent months, though it appears more trees have been planted and that construction crews continue to put the finishing touches on some buildings. It’s not clear what day of the week the video was actually shot, but there is no visual evidence of Apple employees on the site, so perhaps it was made over a weekend.

Read more: A look at Apple’s insanely ambitious tree-planting plans for its new spaceship campus

No doubt, the drones would be an annoyance for Apple. From the beginning, Apple Park was intended to offer a high degree of security and privacy for employees, more so than the current open campus on Infinite Loop where the public can walk right up to the buildings.

Of course, Apple Park was designed before consumer drones became so popular. For years now, drone operators have been charting the progress of the campus’ construction.

With employees reportedly moving in, it wouldn’t be surprising if Apple wanted to halt the practice.

DJI beefs up drone security after U.S. Army ban

August 14, 2017 - 9:48pm

(Reuters) — Chinese drone maker SZ DJI Technology Co Ltd is tightening data security on its drones after the U.S. Army ordered its members to stop using DJI drones because of “cyber vulnerabilities,” a company official told Reuters on Monday.

The privately held Shenzhen-based company is speeding deployment of a system that allows users to disconnect from the internet during flights, making it impossible for flight logs, photos or videos to reach DJI’s computer servers, Brendan Schulman, vice president of policy and legal affairs at DJI, said in an interview.

The security measure had been in the works for several months but DJI said it is bringing it out sooner than planned because of an Army memo earlier this month that barred service members from using DJI drones.

DJI said it has not had any communication with the Army about the issue. The Army had no immediate comment. The other branches of the military have not banned the use of drones by DJI, the largest consumer drone maker with millions of the devices sold.

“The Army memo caused customers to express renewed concern about data security” and prompted DJI to speed up data security changes, Schulman said.

Some drone pilots choose to share images and video with DJI, which makes them visible on its SkyPixel website. But many businesses and government customers have raised concerns about sensitive video and pictures – such as movie footage or images of critical infrastructure – and want to ensure it is never sent to DJI, he said.

DJI said it does not collect images, video or flight logs from users unless they share them. But turning on the new “local data mode” will prevent accidental syncing with DJI’s servers. Its drones do not rely on an internet connection to fly.

Cutting the link between the internet and DJI’s controller apps that run on tablets and mobile phones will disable updates of maps, flight restrictions and other data that the controller application receives from the internet while the drone is in use, he said.

Schulman said DJI plans to make updates to its controller applications available by the end of September, earlier than previously planned. The new apps with local data mode may not be available in all countries if there are regulations that require pilots to have the most updated maps and information.

DJI had about 70 percent share of the global commercial and consumer drone market, analysts at Goldman Sachs and Oppenheimer estimated in 2016.

Goldman analysts estimated the market, including military, to be worth more than $100 billion over the next five years.

U.S. Army halts use of DJI drones due to concerns over ‘cyber vulnerabilities’

August 8, 2017 - 1:38am
DJI drone

(Reuters) — The U.S. Army has ordered its members to stop using drones made by Chinese manufacturer DJI because of “cyber vulnerabilities” in the products.

An Aug. 2 Army memo posted by sUAS News and verified by Reuters applies to all DJI drones and systems that use DJI components or software. It requires service members to “cease all use, uninstall all DJI applications, remove all batteries/storage media and secure equipment for follow-on direction.”

The memo says DJI drones are the most widely used by the Army among off-the-shelf equipment of that type.

DJI said in a statement that it was “surprised and disappointed” at the Army’s “unprompted restriction on DJI drones as we were not consulted during their decision.”

The privately held company said it would contact the Army to determine what it means by “cyber vulnerabilities” and was willing to work with the Pentagon to address concerns.

Analysts at Goldman Sachs and Oppenheimer estimated in 2016 that DJI had about 70 percent share of the global commercial and consumer drone market. Goldman analysts estimated the market, including military, to be worth more than $100 billion over the next five years.

The Army was considering issuing a statement about the policy, said Army spokesman Dov Schwartz.

The move appears to follow studies conducted by the Army Research Laboratory and the Navy that said there were risks and vulnerabilities in DJI products.

The memo cites a classified Army Research Laboratory report and a Navy memo, both from May as references for the order to cease use of DJI drones and related equipment.

(Reporting by Alwyn Scott; Editing by Lisa Shumaker)

Raleigh-based PrecisionHawk wants to bring drone services to businesses worldwide

July 24, 2017 - 4:41pm

Drones have taken the world by storm since they went mainstream a few years ago. They’re dramatically cheaper to buy and far easier to use than any other type of powered aircraft, making them increasingly popular in the world of aerial photography.

Just last year, the FAA loosened regulations on commercial drone use in the US, allowing businesses to provide drone services to other organizations and creating huge potential for drone adoption in the agriculture, construction, energy and insurance industries.

“The consumer and government industries for drones are multi-billion dollar industries, and yet the commercial industry for drones has just started taking off,” said Michael Chasen, the CEO of PrecisionHawk.

PrecisionHawk is one of the foremost leaders in the fledgling commercial drone space. It supplies the hardware (drones and sensors), the software (flight programs and analytics) and the services (pilots and consultation) to its clients. An insurance adjuster, for example, can purchase a drone, survey a property and receive help interpreting the data they gather all from one provider.

PrecisionHawk has raised $29 million from Verizon VenturesIntel CapitalMillennium Technology Value Partners and several other corporate venture capital firms. Chasen has also established a strong relationship with the Federal Aviation Administration (FAA) and taken an active leadership position to identify and secure the rules and regulations of utilizing drone technology.

Watch Chasen’s pitch for PrecisionHawk below to learn how the team plans to bring end-to-end drone services to companies around the world:

Drones + analytics = unique business insights

The commercial applications for drones are many and varied, but the most popular so far is for crop surveying in agriculture. Farmers can use drones equipped with a variety of imaging sensors to quickly and easily survey their land, determine crop yield and identify problem areas.

PrecisionHawk’s hardware and flight software are useful tools for many commercial enterprises , but the analytics software is arguably the most valuable component of its drone system. The algorithm library (sold as a separate subscription) includes many agriculture-related apps as well as cross-industry apps for orthomosaic images, 3D modelling and volume measurements, to name a few.

The company’s consulting teams frequently help clients understand how they can integrate their data into business processes to improve products, and some customers are hiring PrecisionHawk’s developers to write custom analytics.

“Our clients don’t have pre-canned analytics yet, so they’re looking for us to gather the data and use our base analytics, and they’re also hiring us to write very specific analytics for the problems they’re encountering,” Chasen said.

A competitive lead—but not uncontested

PrecisionHawk has a sizable lead over other commercial drone service providers because the team has worked one-on-one with the FAA and other regulatory bodies to establish rules and regulations for utilizing drone technology. As such, it’s currently the only company of its type in the US whose operators are permitted to fly drones beyond visual line of sight, which is useful for clients who need to survey very large tracts of land or hazardous terrain.

However, PrecisionHawk’s many competitors will likely acquire these same permissions as they grow and establish relationships with the FAA. As the commercial drone industry becomes more sophisticated and saturated, other service providers could pose potential challenges for PrecisionHawk.

However, PrecisionHawk’s greatest strength is its diversity of services. Even if a competitor beats out PrecisionHawk in one type of solution or one industry, the team currently has the flexibility to easily shift focus to another market and establish a dominant presence there.

The global future of drone technology

Even if competition becomes fierce in coming years, Chasen reports a $5 billion domestic market and $38 billion global market that can benefit from PrecisionHawk’s products and services. The company already has an international presence, with offices in Canada, Argentina, Australia and the UK in addition to its headquarters in Raleigh, NC.

Since its founding in 2011, Precision Hawk has processed over 8 million acres of land, and its customers include global brands like Monsanto, DuPont, Chevron, Verizon, Pepsico and Yamaha. The team is also continuing to work with the FAA and NASA to address traffic management concerns surrounding the integration of drone fleets into the national airspace.

In a recent pitch for PrecisionHawk, Chasen evoked The Jetsons as an illustration of the expansive role he believes drones will soon have in our world. If his prediction is correct, then PrecisionHawk could be a key company leading us towards that future.

This post originally appeared on Forbes.

Big opportunities in drone software: $565 million and climbing

July 22, 2017 - 9:10am


This year drones have turned from buzzword to a mature technology, bringing value across many industries (see the recent Economist long read on that) and representing an interesting investment opportunity. A number of VC firms have already jumped in, putting $454 million into 100 deals in 2016 alone, and both the amount of funding and the number of deals are on the rise, according to CB Insights.

However, the hardware side of the drone ecosystem is becoming oversaturated. China’s DJI clearly dominates the market, and other Chinese manufacturers, Yuneec and Ehang, have raised significant funding ($60 million and $42 million respectively), while new incumbents have failed to deliver their products to the market.

So the big opportunities for investors at the moment are in drone-related software.

There are two basic categories of drone software startups: vertical and horizontal. Vertical-focused startups target one particular industry, such as construction or agriculture; horizontal companies aim to build a platform for customers across industries.

The companies

I’ve identified the 30 startups I believe are the most promising ones — see the image at the top of this post. From this group we see the following statistics:

  • Drone software companies have raised $565 million from VCs to date. $349 million of that has gone to vertical-focused companies, with the other $216 million going to horizontal companies. (note that some of the companies I’ve counted here under the “software” label are actually full-stack firms that develop both software and hardware, such as Precision Hawk,  3D Robotics, and Kespry.)
  • The vertical-focused segment is also more crowded than the horizontal segment, with 20 vertical-focused companies compared to 10 horizontal ones.
  • Among vertical-focused companies, those targeting construction and mining (which is the hottest drone-related market at the moment) face the most competition, with eight startups, ranging from cash-loaded heavyweights 3D Robotics, Skycatch, Kespry, and Redbird (which have pulled in $178.78 million, $41.67 million, $28.35 million, and $3.19 million respectively) to ambitious new entrants TraceAir,  Datumate, Unearth, and Dronomy.
  • Agriculture was supposed to be a hot segment for drones but is progressing more slowly than other verticals. Still it features some notable companies, specifically Precision Hawk, Slantrange, and Gamaya. This segment has raised just $55.4 million compared to the $260.4 million raised by startups targeting construction and mining.
  • The most notable horizontal companies are Airware and DroneDeploy. They were founded at the beginning of the drone era (2011 and 2013) and have raised significant funding ($31 million and $109.55 million to date). Both companies have taken a full-stack approach and adjusted for the needs of various industries. For instance, Airware acquired Redbird, a construction-focused company previously funded by Airware’s VC arm, Commercial Drone Fund, and DroneDeploy launched App Market, an app store where the company can expand its initial platform with industry-tailored solutions from third-party developers, including Autodesk and John Deere. It’s also worth mentioning that new incumbents Hangar and Propeller Aero are backed by prominent investors, including Lux Capital and Accel Partners.
The investors

Drone software startups have drawn the attention of both top-tier VC funds, such as Andreessen Horowitz, GV, KPCB, Accel Partners, First Round, and Lux Capital, and corporate investors, such as Intel Capital, Qualcomm Ventures, Microsoft Ventures, Sony, and Airbus Ventures

Moreover, along with investments, we’ve already seen M&As in the market, such as Verizon’s acquisition of Skyward and Airware’s purchase of Redbird mentioned above.

Vertical-focused companies appear to be more attractive than horizontal companies to investors at the moment, and here is why:

First, vertical-focused companies take less time to validate product-market fit in their target geographies and industries (or to decline one hypothesis and move on to testing another one) as each industry has its own specific use cases and requirements. Ivan Lvov, go-to-market lead at TraceAir told me, “Deep understanding of customers’ needs is what makes a great product and ultimately helps achieve product-market fit. Even if this understanding is manifested in small nuances, they make a great difference. That’s why I believe it’s extremely hard to create a successful horizontal solution, and a startup is better off by going vertical.”

Shahin Farshchi, partner at Lux Capital, which has invested in five drone companies, including AirMap and Hangar, also supports this view. Now that the foundation has been built for “cheap, abundant, and inter-connected drones,” he said, it is up to “amazing founders to identify nascent applications … These founders will choose verticals that can be worth billions annually, where they have an unfair advantage and have built a deep relationship with customers in those verticals.”

Meanwhile, the horizontal platform approach requires significant marketing efforts to educate customers in each industry on potential benefits, which involves extra costs. And given that new platform players will be facing off against cash-loaded incumbents like Airware and DroneDeploy, the challenge of claiming a piece of the market is especially difficult.

Second, there are more viable exit opportunities for vertical-focused companies. One option is an acquisition by a large corporate in the vertical the startup targets. Vertical-focused companies, after all, have industry-specific competencies and know-how, making them much more attractive than horizontal ones. Verizon’s acquisition of Skyward is a good example here.

Another option is consolidation. Platform companies are acquiring vertical-focused ones to bring more capabilities to their portfolio. Airware’s acquisition of Redbird is an example of this.

We are also seeing vertical-focused companies eyeing expansion into other verticals. Kespry CEO George Mathew told me his company was focused on the “multi-billion dollar market opportunity across mining, aggregates, construction, insurance, and energy sectors,” for example.

I expect competition between platform and vertical-focused companies to increase going forward.

Valery Komissarov is a VC at Skolkovo Foundation, a government-backed firm based in Moscow,  where he covers spacetech and drone companies. He previously worked at space startup Sputnix. You can follow him on Twitter: @Val_Komissarov.