HALCYON: Inventory Report
I always enjoy working with small start ups, not only as an opportunity to get involved early on but also to be able to leave my mark. While Halcyon UAS ended up not getting off the ground (drone pun intended) due to operational challenges, I quite enjoyed my responsibilities as CTO including the planning for the engineering department and researching the industry. Since the internal documents I generated for Halcyon will never be used, I’ve decided to upload a select few of them here in case there’s someone who might be able to find value in them.
The purpose of the following material is to aid Halcyon in determining which drone makes and models to purchase for resale inventory. This report will focus on 3D Robotics, DJI, and Parrot as our primary resale options, although it here acknowledges that micro developers and other alternatives do exist for future expansion. Aside from GoPro cameras and flash storage media, at this time there is very little third party peripheral support, but future research will be needed as it develops.
3DR is North America’s top drone manufacturer, based right here in the East Bay. Their existence has really been one of the few reasons that DJI has not completely monopolized the consumer drone market. With a long term forward thinking approach, 3DR has positioned itself well for the entry of larger players into the industry by developing the best and only truly open source navigation software (Pixhawk/DroneCode), making development partnerships with peripheral manufacturers (most notably GoPro), and offering both full scale and specialized models alongside component parts for DIY repair and builds.
As they have been developing their drone technology, 3DR has been seen as a solid manufacturer slightly behind DJI in reliability and performance. However, their efforts to catch and surpass DJI have been greatly aided by their decision to embrace the open source community with DroneCode, a joint venture with the Linux Foundation. Their new premier offering, the Solo, clearly shows they’ve been listening to their customer base and responded to performance and capability requests, as well as working out a new sharper body design after learning how important the aesthetic can be to the consumer market.
The pinnacle of 3DR’s consumer grade line up is clearly the Solo. Designed in partnership with GoPro to take advantage of the features offered by the HERO4 camera in flight (a unique and valuable utility), the Solo also features a powerful but simple controller + smartphone app combo that allows for various cinematic flight routines as well as programmable one touch navigation buttons. Standard for all current 3DR systems is the Pixhawk 2 flight controller and a smart battery. HDMI and WIFI are also built in, while video capture is recorded directly to smartphone camera roll, making it relatively easy to edit/share/distribute footage immediately. The Solo can be purchased as a separate platform or with the 3-Axis Gimbal included.
3DR’s introductory model, the Iris+ is a stable and sturdy platform priced to sell. It supports the Tarot T-2D Brushless Gimbal Kit and/or LiveView Kit for GoPro, coupling robust video capture and stabilization with 3DR’s relatively easy to control and command Pixhawk 2 auto-pilot and navigation programming. Current 3DR systems come with Follow Me, Automatic Mission Planning, and Flight Protection features. Everything you need to get started, right out of the box.
Not all drones use rotors to fly, and the Aero demonstrates the inherent advantages a traditional fixed wing design incorporates. With nearly twice the battery life of other 3DR models, the Aero offers a great option for surveying, SAR, agriculture, security, or any application that requires longer time in the air, and greater distances to cover. As fixed wings are more likely to have a collision, the Aero has been equipped with a fairly sturdy design that can tolerate a decent amount of wear and tear. The Aero’s wings connect to it’s fuselage via rubber bands, increasing the chance that the wings will be preserved on impact by snapping off and then being easily re-attached.
Previously, the X-8 served as the main chassis for both 3DR’s consumer and commercial rotor drone offering, but with the introduction of the Solo it’s consumer version seems to be redundant. That being said, it is the only rotor drone offered with a mapping module or M designation. It can also be fitted with a gimbal, and possibly more attachments, making the X8+ the most versatile model in 3DR’s product line. With it’s relatively low battery life, unpopular frame design, and higher price compared to the Solo and other models that out perform the X8+, it seems likely to be the last of 3DR’s X-series. We expect to either see the Solo or an entirely new design snagging the X-8’s M designation.
Both the Aero and X-8 are offered with an M designation for mapping (the Aero-M and X8-M respectively), which comes with a surveying package which includes:
Canon S100 with custom 3DR EAI software and fixed mount.
Pix4Dmapper Mosaic 3DR Edition (Windows only).
Spektrum DX7s radio control.
An extra model specific battery (in addition to the single included battery).
Travel Case, fit to accommodate the larger sensor package.
Ground station radios in 433 or 915 MHz.
This package designation pushes it’s corresponding model’s capabilities and prices well into the Commercial grade. The absence of an OS X/Linux compatible version of the Pix4Dmapper software may offer us an opportunity to port the current software over. It is also available as a separate software package, priced nearly as much as a full M-Designation drone and package itself. As drones move into other industries, it is possible that 3DR will offer other designations (i.e. an “A” class for agricultural uses or “S” class for Search and Rescue).
Chinese company DJI is a clear industry leader in drone technology, however they have employed a risky strategy in regards to development. Attempting to control every aspect of their development and distribution has resulted in a ‘my way or the highway’ reputation that is not undeserved. That being said, uniting the development of camera, gimbal, drone platform and user interface as one system offers some serious performance and deployment advantages. Up until now, DJI has leveraged that edge to be the most successful manufacturer to date.
Further, they’re relatively strong software libraries are available to developers, but DJI does retain creative control and rights to said development which has left the majority of independent and hobby developers working on open source options (the largest and most successful project being the DroneCode joint venture between 3DR and the Linux Foundation). It remains to be seen if such an approach will alienate third party development, and whether or not that will cripple DJI’s dominance of the market, but as alternatives like 3DR and Parrot prove themselves comparable and larger corporate entities start to enter the market (i.e. Amazon, Google and the auto industry) it will certainly prove challenging.
DJI’s iconic flagship, the Phantom series is one of the most popular drone model lines yet. The baseline model, the Phantom 3 Standard out performs similarly priced models: at just one hundred dollars more than 3DR’s Iris+ and two hundred dollars more than Parrot’s Bebop and yet it is a far more reliable and popular model.
Phantom 3 Professional/Phantom 3 Advanced
For those who want all the frills and options they’ll need out of the box, DJI offers both the Phantom 3 Professional and the Phantom 3 Advanced. The primary difference between the two models is the equipped camera and the effect it has on flight performance, with the Phantom 3 Pro sporting a 4k camera and the Phantom 3 Advanced retaining the standard HD 2.7k camera. The Pro also comes with a 100W battery charger for faster turn around times. Both models include removable lens and a slightly more useful controller than the standard.
Soon to be replaced by the upcoming Inspire 2, there’s no doubt that DJI is ready to put the overly hyped Inspire 1 behind them. Aimed at being a sleek midrange offering, the Inspire is more expensive than most consumer options but cheaper and less capable than a commercial grade drone. If it had not incurred a reputation for performance and maintenance issues, the Inspire might have carved out a new niche as a high end consumer model, but that does not seem to be the case. The much anticipated Inspire 2 is purportedly DJI’s answer to most of the issues unaddressed in the Inspire 1, but until it is released, the Inspire 1 remains DJI’s black sheep useful only to more experienced users.
The Spreading Wings S series is a line of octocopters built for commercial use, specifically professional cinematography. It’s 8 powerful arms can carry very high load capacities while maintaining the stability a camera platform requires. Far cheaper than other rotor designs with similar capabilities, the S series has a variety of model options from spartan to feature rich, and makes one wonder just why DJI is competing against itself with the far less desirable Inspire 1.
The eurozone is not to be overlooked in the development of drone technology, and French manufacturer Parrot is making strides in cheaper lower end entertainment and mini drones with little to no commercial utility. They are perhaps the only significant drone retailer that is offering ground/wheeled drones in their mini line.
Definitely a departure from the more traditional drone manufacturers, Parrot drones are geared towards entertainment and have a more polished form factor, at a considerable expense to performance. While Parrot drones have little to offer enterprise and professional clients, they would provide a far wider range of introductory offerings and price points for the consumer inventory, which would be an initial focus as we get our distribution points up and running. Furthermore, they embrace open source development which would allow software development a mutually beneficial option.
Bebop Drone w/Skycontroller
While most of Parrot’s product line is geared more towards the pure entertainment value of controlling a drone, the Bebop is an attempt to provide an equivalent to consumer models like 3DR’s Iris+ and DJI’s Phantom Standard. When coupled with Parrot’s Skycontroller the Bebop actually becomes more expensive than both models (although the Iris+ does not have a camera mount standard), but the device can also be controlled with just an iOS or Android device and is the safest drone to fly in doors in it’s price range. While it’s battery life and outdoor performance leave much to be desired, it might become a viable introductory level option with further development.
Parrot really shines when it comes to fun toy like applications and the Rolling Spider serves as a great example. Quite a performer for a mini-drone, the Rolling Spider is equipped with a camera and able to handle out door flight. When you attach the relatively large axel and wheels, the Rolling Spider earns it’s name able to roll on the floor or the ceiling. Offered in a variety of colors, the Rolling Spider has 8 mins of battery life and is controlled via Parrot’s iOS/Android app.
A.R. Drone 2.0 (Elite, Power, GPS)
The most well known drone, and probably the most popular non-mini drone, Parrot offers is the A.R. Drone series. Although it’s camera, engines, and intelligence is not as advanced as the Bebop or anything DJI or 3DR is releasing the A.R. Drone 2.0 enjoys extremely high customer satisfaction and is great for indoor and limited outdoor (winds below 15 mph) activity. Supports gaming applications with a small selection of titles.
Airborne Cargo/Airborne Night
The Airborne mini drone frame comes in a variety of colors and styles. The Airborne Cargo has Lego attachments and comes with one of two lego characters. The Airborne Night has three different color themes and justifies it’s slightly higher price by including a set of head lights. Fun for indoor use, but outdoor use is extremely limited.
Absolutely the only aquatic based drone this report will discuss, Parrot’s Hydrofoil includes an entire aerial mini drone that can be flown separately, but is intended to serve as the aquatic mode’s propulsion system.
Inventory Recommendations
3DR’s Solo will be a must have for any retail offering, especially if DJI’s Phantom series is not available. It’s list price will be prohibitive for some consumers, but the Iris+ would be a great introductory offering at a much more accessible price. If I were to speculate, I’d imagine that the Solo would interest a large number of our clients in acquiring a drone (serving as a draw for business that can demonstrate drone technology’s potential), but I’d expect that a majority would choose the Iris+ after comparing the two price points. The Aero would round out this line up well, offering a fixed wing option with nearly twice the battery range of the rotor models.
The X8+ would really have no clear role or place in this line up, and would probably just eat into sales of the Solo rather than bringing in any new clientele. Notably, 3DR offers a significant amount of component parts with a relatively substantial DIY section on their website. It may be entirely possible to purchase and assemble drone models from this offering. It remains unclear if the larger profit margin would be greater than the additional assembly, packaging, and warranty costs. I would recommend further research and a report on the custom build option with a cost/benefit analysis after we’ve established consistent retail numbers.
Due to the difficulties we’ve already faced in supporting DJI in both retail and development, it may be advisable to not carry any of their products until we’ve established a client base and have firm sales expectations. That being said, it would be difficult to not offer DJI’s Phantom series in this market, although if their dominance falters in the face of competition it may not be necessary to support DJI going forward. If supporting DJI becomes a possibility, the bulk of consumer purchases will be the Phantom and Inspire series (although it may be best to avoid the Inspire series as it will be both popular and problematic, risking high level of customer dissatisfaction).
If retail performs at a level that would support commercial offerings, the Spreading Wings S series would be an asset to the retail inventory. They outperform other models in their price range, are designed around cinematography, and can be configured for relatively heavy payloads. At this time DJI does not report max altitude and speeds, but for it’s purposes it would be hard to imagine performance demands exceeding its capabilities. The eight engine design does place significant demands on energy consumption, with battery life maxing out at around 15 minutes in ideal conditions.
While Parrot’s offerings are hardly comparable to 3DR or DJI they expand our retail coverage through the introductory ranges and well into the toy and even impulse buying range. The A.R. Drone 2.0 series is quite popular, mostly due to it’s control via smartphone devices and it’s association with the iPhone. The Bebop drone can operate on the same interface, but when coupled with Parrot’s range enhancing Skycontroller it is at least in the same ball park as 3DR’s Iris+ or DJI’s Phantom 2 v3.
Notably, Parrot’s designs are not just fun to use but incorporate entirely unique features such as lego attachments, wheeled drones, and even a hydrofoil design. While many of these mini drones have trouble performing outdoors or at range, the entertainment value makes these products great as gifts, especially for younger/novice users. From a development standpoint, Parrot is the only manufacturer with gaming software included, and they are attempting to build an open source community for such applications.
The following breakdowns display potential product line ups for our retail inventory. Until we ascertain or negotiate our profit margins with each manufacturer it is not possible to know exact profits, but each set compares models’ list prices against number of units out of every hundred sold to determine the percentage of gross drone model sales. If we assume that all models in our inventory are being sold at the same profit margin (which may not be the case), then the percentage of gross would be equal to the percentage of net earnings from drone sales.
One-of-Each-Type Only
This offering has very limited options, but would result in higher volume by product as there is little to no functional overlap and offers the highest gross yield.
3DR Solo w/3-Axis Gimbal $1399.95 #20 = 35.6%
3DR Aero $1350.00 #08 = 13.8%
Parrot Bebop w/Skycontroller $899.99 #28 = 32.1%
Parrot A.R. Drone 2.0 Power $369.00 #36 = 16.9%
Parrot Hydrofoil $159.00 #08 = 01.6%
Seasonal Start
If Halcyon is able to get a distribution point online in time to take advantage of the seasonal shopping period, this line up would be geared towards gift/toy market advantages.
3DR Solo $999.95 - $1399.95 #08 = 23.7%
3DR Iris+ $599.99 #15 = 22.2%
3DR Aero $1350.00 #04 = 13.3%
Parrot Bebop $499.99 - $899.99 #09 = 11.1%
Parrot Rolling Spider $99.99 #18 = 04.4%
Parrot A.R. Drone 2.0 Power $ 369.00 #12 = 10.9%
Parrot A.R. Drone 2.0 GPS $ 349.00 #08 = 06.9%
Parrot Airborne Cargo $ 99.99 #19 = 04.7%
Parrot Hydrofoil $ 159.00 #07 = 02.7%
Efficient Option
Similar to ‘One-of-Each-Type’ but with slightly more introductory/low end coverage.
3DR Solo $999.95 - $1399.95 #15 = 27.1%
3DR Iris+ $ 599.99 #19 = 17.5%
3DR Aero $1350.00 #09 = 18.7%
Parrot Bebop $499.99 - $ 899.99 #16 = 16.6%
Parrot A.R. Drone 2.0 Power $ 369.00 #30 = 17.1%
Parrot Hydrofoil $ 159.00 #11 = 02.9%
Optimistic Volume
Geared towards a high volume expectation, this line up also includes DJI (however, the first 100 units will not meet DJI monthly sales minimum).
3DR Solo $999.95 - $1399.95 #06 = 11.0%
3DR Iris+ $ 599.99 #08 = 07.8%
3DR Aero $1350.00 #03 = 06.6%
3DR Aero M $5400.00 #02 = 17.5%
DJI Phantom 3 Standard $ 699.00 #09 = 10.2%
DJI Phantom 3 Professional $1259.00 #06 = 12.1%
DJI Spreading Wings s900 $1400.00 #02 = 04.5%
DJI Spreading Wings s1000 $1900.00 #02 = 06.2%
Parrot Bebop $499.99 - $ 899.99 #07 = 07.0%
Parrot A.R. Drone 2.0 Power $ 369.00 #10 = 06.0%
Parrot A.R. Drone 2.0 GPS $ 349.00 #06 = 03.4%
Parrot Airborne Cargo $ 99.99 #16 = 02.6%
Parrot Airborne Night $ 129.99 #16 = 03.4%
Parrot Hydrofoil $ 159.00 #07 = 01.8%
