With heightened US-China tech competition looming ahead of the US presidential election, one outcome seems certain: the rivalry—especially in drones—will only accelerate efforts to reduce dependency on Chinese suppliers. The commercial drone market, in particular, is garnering strong interest as firms eye the gaps left by DJI, the leading player now facing tougher restrictions. Industry analysts predict DJI may face challenges in the commercial and specialized markets, though its consumer base likely won't be affected.
The commercial drone sector continues to show steady—though not explosive—growth, with an annual rate of 7.1% and projections reaching US$54.6 billion by 2030, as businesses increasingly recognize drones' potential for enhancing efficiency, reducing costs, and streamlining operations. According to DroneII's Drone Market Report 2023-2030, services, rather than hardware, now dominate this market, signaling a shift in focus.
In the current market landscape, drone hardware—including full assembly, parts, and subsystems—accounts for just 16% of market share, with software at only 3.9%, while over 80% of revenue comes from services. These services encompass solutions like surveying, deliveries, and monitoring, supporting industries such as construction, agriculture, energy, environmental monitoring, and logistics.
Industry experts emphasize that although drones are widely applied, hardware alone isn't the primary selling point. Since these devices serve specific purposes rather than functioning as generic products, companies need to focus on providing tailored end-to-end solutions and service strategies. For instance, when the Taiwan Coast Guard tested land-based drones, the drones' wind resistance didn't meet expectations—highlighting the need for mission-specific designs.
Commercial drones aiming to enter specialized markets need domain-specific expertise, experts note. Manufacturers are advised to find partners with this specialized knowledge, especially to meet demands like mapping precision in agriculture, construction, and mining or tracking for security.
According to industry insiders, throughout 2023, allied democracies have strengthened their resolve to sever ties with Chinese supply chains. DJI, which once controlled 80% of the drone market, now faces serious competition, though the market shift will take time. Companies that don't secure their position soon may find themselves out of the game within three years.
While DJI's strong value proposition still appeals to consumers, industry analysts believe it could lose ground in commercial and specialty markets as de-risking strategies play out, especially in security-sensitive government and military applications. Taiwanese companies looking to enter the space should focus on the commercial drone market, where high customization needs create "blue ocean" opportunities. This is a natural fit for Taiwanese firms, while DJI's strategic focus remains largely outside these highly tailored segments.
