The number of drones sold grew 224% from April of 2015 to April of 2016, according to a report from The NPD Group’s Retail Tracking Service.
The 2015 holiday season was a big driver within that period, with drone unit sales increasing 445% from the prior holiday season in 2014.
Federal requirements that drone operators must register did nothing to hurt sales in the months following the October 2015 announcement. Drone sales doubled month-over-month in November and December of that year, according to The NPD Group’s report. Many drone operators initially resisted registration because they opposed giving personal information to a federal database and paying the $5 registration fee. But since registration opened in December 2015, nearly half a million drone users in the U.S. have gone ahead and done so, according to the Federal Aviation Administration’s database.
Drones may have a reputation as toys for millennial technophiles, but young people don’t make up the majority of buyers. Ninety percent of drone buyers are older than 31, according to a separate report from Skylogic Research.
People also aren’t buying their drones from big-box retailers like Target TGT, -0.01% or Best Buy BBY, +0.25% The majority of drones are purchased either directly from the manufacturer or dedicated drone dealers, Skylogic Research’s study found.
Chinese drone manufacturer DJI has a 50% market share in North America, making its drones by far the most popular. 3D Robotics and Yuneec trail behind with 7% and 4% market share, respectively.
Even as the rules surrounding flying drones become a point of focus for the FAA, among others, improvements in drone technology have made them easier and safer to operate.
Up until the past few years, drones required users to do a lot of their own legwork to build the drone and mount a stable camera to it. Now, most drones come ready to use and with much more advanced software and video capabilities.
With the introduction of the DJI Phantom 3 in August 2015, says Logan Campbell, CEO of drone consulting company Aerotas, drones became “acceptable on so many new levels… It’s not amateur-looking footage anymore. Now you look at drone footage and say ‘wow, that’s a beautiful video.’ ”
DJI, which is considered a unicorn startup company with a valuation at $1 billion, wowed drone users with the launch of a “crash proof” drone in March 2016. DJI’s Phantom 4 drone has two sensors on the front side of it that can detect objects ahead of it and fly higher to avoid it, if possible.
But Intel-funded INTC, +0.25% Yuneec is quickly playing catch-up to DJI with the launch of its Typhoon H drone, which was chosen as a “Best of CES 2016” winner at the annual Consumer Electronics Show in January of this year.
Meanwhile 3D Robotics has been struggling in recent months after laying off an undisclosed amount of staff in March 2013. Sales of its drone, “Solo,” weren’t as high as expected and the company wasn’t able to drop prices to match its competitors, according to internal emails obtained by MarketWatch.
GoPro GPRO, +2.20% could join the fight for drone market share soon. GoPro’s “Karma” drone was expected to launch in the first half of 2016, but its launch has been postponed for the 2016 holiday season.
While drones are primarily used for hobby photography right now, Campbell said that’s going to change this year. The FAA is expected in June to put out new regulation, referred to as Part 107, that will ease restrictions for people and companies looking to fly drones commercially.
“The regulations are so burdensome for commercial users to make money,” he said. “With Part 107, it will be a real breakthrough.”