Can DJI Weather the Storm?

With so many physical and mobile products connected to the internet these days, hand-wringing over security breaches continues unabated and promises to dominate the news about “unintended consequences of connected life” for the foreseeable future.

Not surprisingly, the blooming drone market—especially those equipped with video cameras—is coming under extra scrutiny, and it’s getting harder to determine how warranted that extra scrutiny is. Leading Chinese drone maker DJI is a case in point.

According to an analysis of FAA drone registration data by Bard College, DJI has continued to earn a commanding share of the drone market throughout 2017. This confirms data from earlier in the year showing the company pulling away from its erstwhile rivals.

Product introductions have been fast and furious in 2017, including everything from tiny, consumer-friendly drones like the Spark, and the addition of a  6K camera for the Inspire 2, its professional drone. There was also reassuring evidence suggesting that Phantom-class drones won’t, in fact, take down a jetliner in the event of a mid-air collision.

Beyond products, the company has been hard at work attempting to address legal and regulatory concerns for drone use. In October, they announced the equivalent of a wireless license-plate that allows law enforcement to discover to whom a particular drone is registered.

Yet for all its advancements, DJI saw more than its fair share of turbulence in 2017. Trouble started with an August report that the U.S. Army was prohibiting the use of DJI drones due to data security concerns. To address the Army’s concern, DJI instituted a bug bounty program to identify and patch security holes, only to threaten a researcher who found a very serious bug with prosecution.

But perhaps the highest profile blow came from the Los Angeles division of the U.S. Immigrations and Customs Enforcement (ICE), which accused DJI of spying for the Chinese government—a charge the company vehemently denied (in point of fact, they called it “insane” and pointed out several factual errors). The department’s brief against DJI revolved largely around one unnamed source in the industry and a worst-case scenario reading of DJI’s aforementioned security hole and clients.

To wit, ICE accused DJI of targeting major infrastructure companies—natural prospects for DJI to pursue—because they are companies that require drones for inspections. That said, both the U.S. and China are thought to use their domestic electronic companies to smuggle spyware abroad, so while ICE’s charges are publicly unsubstantiated, the underlying suspicions aren’t wholly unreasonable.

So DJI enters 2018 with a nearly unassailable market position, a strong product portfolio but trailing a host of lingering questions about the security of the data its products are capable of collecting. In this, they’re not so dissimilar from most modern tech giants who are constantly facing scrutiny over data collection and security practices. Barring some new revelation or regulatory move from the U.S. government, it’s very likely the company will extend its drone dominance in the foreseeable future.