DJI has not caught a cold in the USA yet – but for how long?

We all loved Romeo Durscher as the face of public safety drones during his time at DJI.

Then – terrified of losing such an influential voice at time when the walls seemed to be closing in on the industry as a whole – we had our hearts in our mouths for a fleeting second when Romeo announced that he was leaving DJI, and did not say what his next stop was.

Then the man pitched up at open-source drone software Auterion in his native home of Switzerland, and we could breathe again.

Aaaahh… Bullet dodged.

But the questions always lingered on the timing of the Romeo’s departure as DJI’s Senior Director of Public Safety Integration, where he had made such a worldwide impact, selling the gospel of the effectiveness of drone technology in public safety at nearly 100 international events across the world.

But now we know why.

As it turned out, the oxygen at DJI’s USA offices in Palo Alto, California, was no longer like the oxygen at workplaces elsewhere in the world.

According to a report from Reuters, the revolving door of staff coming and leaving the $15billion company – more leaving than coming – was a deal breaker for employees at an organisation that had other more important dragons to slay; namely the USA federal government, which for the past four years has been leading an onslaught for the grounding and banning of almost all DJI drones from federal government employ, because they were alleged to be on spying missions on behalf of China, the US’s economic nemesis where DJI was born in 2006.

All told, the company is said to have lost 200 employees in the USA last year alone, with their Research and Development department effectively closing this year; following the resignation of its head, and the subsequent laying off of the rest of the department’s staff.

It does become a little hard to breathe in such an atmosphere.

“It’s not an easy decision to leave the market leader that’s really far ahead of everyone else,” said Romeo, who joined DJI in 2014. “But those internal battles were distracting from the real purpose and in 2020 it got worse … we lost tremendous talent at DJI and that’s very unfortunate.”

Auterion grabbed at least three of DJI’s former top talents; with Romeo joining former director of business development, Cynthia Huang and Arnaud Thiercelin who had left the company as Head of US R&D in 2019. The loss of key managers personnel has compounded problems caused by the federal government restrictions, and raised the once-remote prospect of DJI’s dominance being eroded; according to four of the people, including two senior executives who were at the company until late 2020.

Staff members compared DJI’s internal rivalry over projects to HBO’s Game of Thrones, the tv show about literal and figurative backstabbing whose final season was backstabbed so mortally by the show producers that its cult fanbase feel a collective sickening wave of nausea each time they think of rewatching the show, and think they will have to go through the six episodes of Game of Thrones Season 8.

Romeo said this rotating door of Shenzhen bosses saw him reporting to twelve different managers in his six years at the company. Huang said she became increasingly frustrated because she felt DJI wasn’t able to meet all the growing demands of the enterprise market. Besides, job cuts over the past year added to the reasons she decided to leave.

“Some of the people that we lost in those layoffs, it didn’t make sense,” said Huang, who was hired in 2018 to take the lead in building DJI’s enterprise business in North America. “The continued exodus of talent was discouraging.”

In its report, Reuters said that DJI, founded and run by billionaire Frank Wang, said it made the difficult decision to reduce staffing in Palo Alto to reflect the company’s “evolving needs”.

“We thank the affected employees for their contributions and remain committed to our customers and partners,” it said, adding that its North American sales were growing strongly. “Despite misleading claims from competitors, our enterprise customers understand how DJI products provide robust data security. Despite gossip from anonymous sources, DJI is committed to serving the North American market.”

However, the company offered no perspective on the other staff departures in the USA, although it did acknowledge last year its global structure was becoming “unwieldy to manage”.

Its claim of dominance in the $4,2billion USA commercial drone market (according to 2020 estimates from the Department of Defence) was buttressed by the latest market report from drone industry consulting firm, Drone Industry Insights, which said DJI’s loss of government business in the country has had little effect on its drones’ popularity among private commercial drone users — at least for the year under review.

DII said the Chinese drone maker lost only 0.7 percent of its total market share on the USA market in 2020, with the DoD confirming that DJI drones accounted for 90 percent of the commercial market in the country, and 70 percent worldwide.

In other words – it is not the DJI drones that are bad – its their geopolitics.

Or specifically, the geopolitical tug of war between Beijing and Washington DC.

Because DJI is not the only Chinese company to have been caught in the crossfire of trade and diplomatic hostilities between the two countries. Dozens of other companies like Huawei, ZTE, Xiaomi and Bytedance (which owns the social media app, TikTok) were put on the USA’s entity list for reasons that varied from military connections to human rights violations.

“The December order adding the company to the U.S. Commerce Department’s “Entity List” along with the closure of its R&D operation in California could affect its ability to serve the needs of U.S. customers, according to three former senior executives and two competitors.   

“The Commerce Department listing, enacted over allegations including DJI enabled “high-technology surveillance”, prohibits the company from buying or using U.S. technology or components.” 

Market watchers are now interested in seeing what will happen to DJI’s grip on the US drone market when the time comes to change drone fleets, with Romeo opining that the closing quality gap between DJI drones and the ones made by their competitors might tempt drone users, especially those in the public safety industry, to choose alternatives to DJI that are not saddled with spying and data security allegations.

According to David Benowitz, the Head of research at drone market firm Drone Analyst and a former DJI employee, a fleet is typically expected to last three to four years.

The DJI Phantom had become part of the integral kit for many a fire and rescue entity in the USA, and as their life cycle comes to an end, it is interesting to see whether they would return to DJI as clients; or choose new drone technology partners from the five manufacturers that the DoD claimed were the most reliable last year – Parrot, Altavian, Teal Drones, Vantage Robotics and Skydio.

0 Comments

Leave a Comment

Login

Welcome! Login in to your account

Remember me Lost your password?

Lost Password