Why China will weigh on the drone market

by bold-lichterman

China will now have to be reckoned with in the drone market. Intel announced that it has invested $ 60 million (approximately € 52.9 million) in Yuneec International, a Hong Kong-based company specializing in the manufacture of drones designed for aerial photography.

Founded in 1999, Yuneec claims to manufacture more than 1 million copies every year. These are then marketed under the Typhoon brand, or as a white label for other companies. The company also claims to have filed around 100 patents and has more than 1,800 employees in Hong Kong, Shanghai, Los Angeles and Hamburg.

Chinese DJI would be valued at 8 billion dollars

Intel had already advanced its pawns in the sector. The group had invested last year, via its investment fund Intel Capital, in PrecisionHawk, a start-up specializing in the edition of aerial image analysis software. The semiconductor manufacturer indeed needs to diversify its activities while it has been facing a decline in sales on the computer market for several years. What to want to accelerate on the niche of the drones, in particular by looking on the side of China.

Alibaba experimented with delivery by drone in February 2015.  Credit: Taobao.
Alibaba experimented with delivery by drone in February 2015. Credit: Taobao.

This is not the first time that Chinese know-how in this area has attracted investors. In May, DJI Technology, a manufacturer based in Shenzhen, completed a funding round of $ 75 million, in particular with the American fund Accel Partners, in order to finance its expansion. The Wall Street Journal then evoked a valuation of around 8 billion dollars.

A few months later, Ehang Technology, another start-up based in San Francisco, Guangzhou, Beijing and Shanghai, for its part, received $ 42 million from several Asian investment funds, having already raised $ 10 million in the past.

Giant Alibaba has experimented with drone delivery

It must be said that the drone market is booming as the uses are important. If one thinks of photography and aerial video, it is also of interest to many sectors such as construction (to inspect buildings), agriculture (for soil analysis) [lire notre article : [Agriculture] Big data is in the field, editor’s note]or even security.

It is also generating enthusiasm in the logistics sector. Thus, the Chinese e-commerce giant Alibaba carried out in February a first experiment of delivery by drone, following the example of its American rival Amazon. What to post a photograph on the blog of Taobao, one of the group’s marketplaces.

Ultimately, the commercial drone market could reach $ 1.27 billion by 2020, an annual growth rate of 109.1% between 2014 and 2010, according to estimates by the firm MarketsandMarkets.

Photo credit: Yuneec International