Could Drones-With-Cameras Soar Past Action Cam Sales?

At an atypical press event last week, dominant drone market leader DJI announced its new advanced Phantom 4, a $1,400 model with a 4K camera mounted underneath.

What was atypical was the broad-based press event itself, something the company has not been known for. Also atypical is its sales partnership with Apple, where the Phantom 4 is, for the time being, exclusively available for pre-sale.

But the event, along with the plethora of camera-equipped drones on display at the annual Toy Fair last month—most selling for less than a tenth of the price of the Phantom 4—may be a sign that drones-with-cameras (DWC for the sake of simplicity) have entered the mainstream, perhaps becoming a candidate for the Next Big Thing in camcorders.

Historically, there have been a lot of Next Big Things in camcorders, the most metamorphically mercurial of any tech category. In essentially a single generation, the top-selling camcorder recording media has serpentined from VHS to VHS-C to Hi8 to MiniDV to DVD and mini DVD to flash memory, and in form factor from beer can/football style to pistol grip to slab to mountable action cam—and that’s not even counting smartphones, which are clearly the best-selling camcorders at present and will be for the foreseeable future.

Action cams have been the camcorder darlings for the last few years. But dominant market leader GoPro suffered a disappointing Q4 2016. Even though its sales grew 27 percent year-on-year, the company was expecting sales nearly twice as high. This unexpected and relative slowdown perhaps reflects either the beginning of the end to its category dominance in the face of competition and/or overall market saturation. After all, how many people want to mount a camera on their helmet while skiing, scuba diving or Moto crossing? At a certain point, since the stubbornly sedentary make up the vast majority of the camcording population, GoPro and its ilk are going to run out of action enthusiasts to sell a mountable camera to.

Considering the quicksand that is the camcorder business, is this the beginning of another quick shift, from action cams to DWCs?

It’s been difficult to suss out DWC unit sales. According to CTA, 700,000 total drones were sold in the U.S. alone in 2015 and a projected 1.1 million in 2016—and possibly an equal number around the rest of the world. But only a minority of these drones, which is estimated at anywhere from a quarter to a third, included an integrated camera. But we expect the percentage of DWCs to increase as the whole idea of aerial photography takes off.

According to the marketing folks at DJI we spoke to at their event, more DWCs were sold last year than standalone action cams. Frankly, until proven otherwise, we don’t believe that for a second. DTC figures more than 11 million action cams were sold worldwide last year and likely more than 12 million will be sold this year, compared to less than a million DWCs. But it’s quite possible that more DWCs will be sold this year than traditional beer can camcorders. That is, if DWC sales trajectory continues to rise as quickly as drones do themselves, and as the action camera market continues to commodify—well, we all know how volatile the camcorder market has been this century.

Which brings us to a bit of an epilogue to this minor analytical rumination. Perhaps it won’t be DWCs that fly above action cams, but 360-degree spherical cameras as VR becomes the Next Big Thing. But since 360 camera sales are still counted in the hundreds of thousands of units, that’s an analytical rumination for another day.