Sure hope his trade war isn’t gonna result in a 25% increase for DJI drones. Has anyone heard anything?
Will we get screwed by Trade War?
- Thread starter MarkyGA
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Look at the big picture, not if you will have to pay more for your quad.
That is how DJI got ahead, by being able to under cut everyone elses prices. Now maybe an American company can compete instead of going under. More jobs here. More competition. Better service. End of the drone monopoly.
That is how DJI got ahead, by being able to under cut everyone elses prices. Now maybe an American company can compete instead of going under. More jobs here. More competition. Better service. End of the drone monopoly.
What American companies sell drones? I never looked at price when I purchased mine. My decision was driven by the amount of educational support that was available to me via forums like this and YouTube.
You have kind of shown my point by your statement. If you read about DJI's agenda. If a company puts out a drone they plan to under cut it in price and flood the market with their drones. Also to dominate the the market so fast that no one else can compete.
Karma went under last winter. They were made by GoPro.
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DJI outcompetes all the Chinese drone makers too by producing better products and innovating rather than producing copycat offerings.
The Karma went under because it was a rubbish drone.
It would take years for a domestic startup to catch up with DJI, and they would certainly not manufacture domestically.
A 25% increase in your prices in the US would still be cheaper than here in Aus.
When I bought my first P3P it cost AUD $2199.
I would pay more for a locally manufactured product. All the clever tech in DJI products is bought in. They (DJI) were in the game early and have huge market share and brand recognition but unless they have exclusive deals with intel/Movidius/realsense, TI etc there is nothing to stop other outfits producing an equally performing product. Doing it cheap is the problem. Nobody can tell me DJI stuff is well made, just look at the injection mouldings. I replaced 5 shells on 3 P3’s and the 4’s are an improvement but it’s not great
Purchase price is only part of the equation. A large part, but not the only part. They spent the money early on to build the infrastructure to support their platforms. They spent a lot of money on the software side. There is a fair amount on AI running to handle collision detection and stuff like to track your hands to control drones. DJI made the decision to provide APIs to allow apps to control the devices. There's a cost to that and it's not cheap. That's one of the reasons they partnered with Microsoft, even DJI doesn't have enough resources to fully exploit AI and CV on the device.
And there is the support software. They geofence their drones, but provide the ability to self-unlock from warning areas. That requires the software and servers to support that. Not rocket science, but there is a dollar cost to develop and maintain services like that. If you are going to compete with DJI, you are going to need deep pockets because you need to catch up to the money they already spent to get where they are. When DJI releases a new platform, they get to piggyback on the development and support costs that were spent before. That makes for a huge entry barrier for anyone else that enters the market.
There's a huge 3rd party ecosystem around DJI products. You need to have market share before you get the accessories that bring all the extra value to our birds.
DJI is the 800 lb gorilla in this space, and that's not going to change anytime soon. A 25% tariff (percentage selected from the Bureau of Imaginary Numbers) wouldn't affect DJI's market share. No one else is going to be competitive. Part of DJI's price advantage is that they make their own drones, they do not contract out the manufacture. The only non-Chinese company that I could think of that makes any number of consumer drones is Parrot. Parrot is French company that designs their drones, but they contract the manufacture in, wait for it, China. Parrot starts out with a price disadvantage because they don't own the manufacturing process.
If you are a US company that wants to be in the drone market, the money is not in hardware. It's in the software running on the drones and the infrastructure behind providing drone imagery as a service.
The Karma failed for a number of reasons. The primary one was that it wasn't as good as comparable DJI drones. If you want to compete with DJI, you need to bring something new or better to the table. They didn't. First production run models dropping out of the sky due to a faulty batter latch design didn't help. GoPro had to do the Karma, integrated cameras on drones affected their bottom line. Karma could have worked, there is market for a drone that worked well with their cameras. They just blew the execution. Which is a shame, competition helps everyone.
Do you have any direct knowledge of what amount of the actual manufacturing DJI does in house? Wcomfortable they do the assembly. What about sub components? We know there are at least three external manufacturers for the completed batteries (it’s basically a text book implementation of the TI BMS for the smarts), hard to beleive the cameras aren’t supplied complete- the P3 lenses were basically a security camera Grade assay from a non DJI entity. We know they don’t make sensors and untill recently used an M43 mount for the X5 so nothing real fancy there. The OA tech is bought in, DJI may have worked with Movidius early on in development but it’s all intel now. Gesture recognition is movidius/intel brains. I’m not disagreeing with you but someone like intel could give DJI a serious run if people were prepared to pay more for quality. Most aren’t.
DJI doesn't manufacture the components, but they own the assembly. That gives them tighter control and faster turn around time.
Intel is doing some cool stuff the software side, they have leading edge code in their Shooting Star product. But it's not really a consumer product.
I think enough people would pay a premium if there was added value to have a viable market. Apple sold more of the iPhone X last year than of the cheaper iPhone 8.
I’d support any tariff on Chinese products that brings them in line with our trade deficit. Not to mention the years of technology theft from us! Why bother to build something new when they can just steal the data from us knowing we would not retaliate! However President Trump, with his business knowledge, knows how do deal with cheaters like Red China and in the long run don’t be surprised if DJI future sakes prices here don’t drop! President Trump, Love or hate him, you can’t knock his success in past business deals and current growth of our country!
Thanks
Jim
WA5TEF
Thanks
Jim
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This is not much of an argument, if that was the point of your post.
The same could have been said everytime someone had an idea, for an automobile, computer, smartphone, etc.
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Do you understand how tariffs work and who pays them? (hint .. it's not the Chinese)
Do you understand what a trade deficit is?
Umm ... successes like the Taj Mahal Casino resort, the Plaza Hotel and Casino, and Marina Hotel Casino that all went bankrupt, twice?
Or that "university"?
What is a relevant example of a domestic startup that designed a complex technology involving design and integration of hardware or software in a matter of weeks or months that surpassed a established market leader who's been doing it for years . . . and then sourced components and production domestically to become a market leader?
I'm saying tariffs do little to change the mechanics of new product development and the reality of a global economy where design, components and manufacturing are sourced from any number of countries. I'll bet a lot of money that the imposition of tariffs isn't going to be a catalyst to push the domestic drone industry into overdrive.
I'm not an economist so maybe I'll eat my words, but my bet is not. By the time any effect trickled down in this industry, tariffs would be a forgotten memory and we'd be back to square one. I am not commenting on anything other than the perceived scope of what they affect.
When has any US tariff resulted in lower prices for the consumer? In 2009, President Obama slapped a 35% tariff on Chinese tires. That saved about 1200 jobs in the US tire industry. The average price of a Chinese tire went from $31 to $39. US tire manufactures raised their prices by about 3.2%, a cost that was passed the consumer to the amount of $1.1 billion. China retaliated with a tariff on chicken parts that cost US chicken processors $1 billion in lost sales. Source
Can you explain how DJI would be able to lower their prices if Trump applies a 25% tariff against Chinese goods?
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The playing field has been so skewed for so long in China’s favor that we literally have handed them their economy on a silver platter while simultaneously shackling our own. It will take years of aggressive negotiations and smart business sense to just begin to turn that giant ship around. Obama’s tire tariff was a teeny little shot over the bow. Trump is actually getting serious with the Chinese. He knows what he’s doing on this issue and the media isn’t reporting the facts or fairly on this important issue. Sometimes things have to get worse before they can get better - this being a good example. What will matter more than Trump is the administration following his and if they keep up the fight rather than letting the Chinese have their way. That’s the easier route as a consumer nation, which we have become. That’s fine as long as you’re more of a producer than a consumer. This country has been gaining heavily on the consumer side while steadily losing out on production for various reasons, but almost entirely related to moronic liberal policies that prevent innovation. Money drives the world economy. Innovation & Production drives income from consumers. But if you don’t create a climate for jobs in your own country to create consumers then none of that matters and you end up like Belgium or Sweden. It’s more than just about the price of your drone, but if we are ever to see an American equivalent to DJI it’s best chance is via the trade war Trump has shown the brains and guts to actually get in there and fight it. Until him it has been ignored or mostly neglected and it is the biggest reason we aren’t the global superpower we were before NAFTA. Ross Perot was right. Whether or not it gets fixed will only be decided in another ten to 15 years.
Yes!!! I agree 100%. I just hope you don’t get banned from here for speaking the truth! Thanks for posting that!!
Jim
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Jim
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