It was good while it lasted, but Skydio consumer drones are no more.
As we predicted when Skydio consumer drones went out of stock earlier this year, the company has chosen to shut down its consumer drone arm, instead focus on building drones and related products for enterprise and defense industries. The San Francisco Bay Area-based drone maker announced this week that it will no longer offer its Skydio 2+ Starter, Sports, Cinema, or Pro Kits.
That puts Skydio on an ever-growing list of American drone companies have tried to build camera drones under $1,000 — and failed. Then again, perhaps “failed” isn’t the right word.
Skydio is wildly successful. The revolutionary Skydio 2 drone launched roughly four years ago as an especially-great tool for photographing action sports. It easily swooped the title of best follow-me drone for many years in a row, and it held its own as an alternative to DJI in rankings of the best camera drones overall. The drone had an excellent camera, and it was all-but crash proof thanks to robust obstacle avoidance sensors.
So what is happening with Skydio? For starters, Skydio itself is certainly not ‘no more’, only Skydio consumer drones.
Why did Skydio kill its camera drone business?
If you want to buy a new Skydio drone these days, then it’ll have to be of the enterprise variety. The Skydio 2+ drone is still very much in production, but now it’s only available for Enterprise customers.
That’s because the company said it is sunsetting its consumer businesses in order to focus more on enterprise and public sector customers.
Increased focus on enterprise and military markets
“The impact we’re having with our enterprise and public sector customers has become so compelling that it demands nothing less than our full focus and attention,” said Skydio CEO Adam Bry in a prepared statement.
And the company really has been leaning into the enterprise and military side of things. In fact just last month, Skydio donated nine drones to the Office of the Prosecutor General of Ukraine, which are set to be used to document instances of destroyed civilian infrastructure, and evidence of human rights abuses on frontline communities and liberated territories committed by the Armed Forces of the Russian Federation.
Beyond military use, Skydio has landed some other key commercial clients recently. Skydio in June received approval from the Japan Civil Aviation Bureau (JCAB) to remotely fly drones using Skydio Dock and Remote Ops beyond visual line of sight (BVLOS). Then, announced it was working with the Alaska Rural Remote Operations Work Plan (ARROW) Program to test BVLOS flights around rural Alaska communities. It’s also worked closely with other major giants including Taser-maker Axon and natural gas company Dominion Energy.
The Skydio 2+ Enterprise Kit is available for purchased by commercial enterprises and public sector organizations from their Skydio sales representatives or authorized resellers. And beyond its drones, either in the form of things like the 2+ Enterprise Kit or the Skydio X2 drone, Skydio builds related commercial products like adaptive mapping software Skydio 3D Scan.
Inability to compete with DJI
Skydio also won’t say it outright, but it’s been largely understood that the consumer drone industry cannot compete with behemoth DJI, which has completely dominated the consumer drone market. Just this past month, it launched an all-new consumer drone called the DJI Air 3 — which has similar (and arguably improved) specs to the Skydio 2+ drone and a similar price point.
While the DJI market share has been declining in recent years, it is still a huge majority.
There’s more money on the enterprise side
Consumers are price conscious, while industries are less so. An analysis of Google search volume data will show you that people want to know the best drones under $500, or even the best drones under $100.
Conversely, big corporations or government agencies might be less price sensitive. For example, The median upfront cost of drone equipment for public safety agencies in 2020 was $12,000, according to a study from The Center for the Study of the Drone at Bard College. Quite simply, a company like Skydio can likely charge more for a similar product sold to enterprise and military customers, versus consumers.
What does this mean for people who own Skydio consumer drones?
While the company said it won’t produce any more Skydio 2+ drones in the consumer-oriented configurations, that doesn’t mean they’re completely over. The company said it will continue to provide software and customer support for existing customers.
It also pledged to stand by all warranty terms, Skydio Care, and will continue conducting repairs. It also still has inventory of accessories, which might come into play for existing users needing replacement parts like batteries, propellers and charging cables.
Where is Skydio headed now?
Is there any hope that Skydio will once again come back with a consumer-friendly, camera drone? Skydio won’t say whether there will ever be another Skydio drone offering for consumers, though it seems unlikely in the short term.
“We are not able to share any updates about our future product roadmap,” according to a statement on Skydio’s website. “Please sign up for emails or follow us on social media to keep up to date on new product developments and other announcements.”
In the near-term, though, it seems as though Skydio has huge growth plans on the enterprise side of things.
The company is hosting a big event on Sept. 20 called Ascend, which you can tune into live online (and there are also exclusive invites to attend in-person). The event is set to showcase Skydio’s advancements in AI and computer vision and will likely show off the latest products that the company has been working on. Register to participate in the Skydio Ascend event virtually.
What the Skydio news means for the broader drone industry
The news of Skydio ending its consumer drone business comes at a particularly turbulent time for the drone industry.
DJI’s enterprise arm could be in trouble
For starters, even DJI is in the midst of turmoil after recent news that China imposed restrictions on exports of long-range civilian drones. That regulation takes effect on Sept. 1, 2023. Not a ton is clear yet, and it doesn’t seem like the consumer side of DJI will be impacted. But, experts expect DJI’s thermal-equipped, enterprise products, such as the DJI Mavic 3T, to fall under the restrictions.
While China’s own restrictions could put a limit on DJI’s enterprise drone sales, they were already in trouble anyway due to myriad legislation proposing to end use of DJI drone among federal customers. Examples of such legislation include the American Security Drone Act, a bill proposed in February 2023 by Republican Senator Rick Scott of Florida that would prohibit most federal agencies from using drones manufactured in China (which includes DJI drones).
“There is an obvious irony when looking at it from our domestic perspective,” said David Benowitz, Director of Marketing at BRINC, which is a Seattle-based company that builds drones for public safety and defense applications. “With the U.S. government considering bans of DJI and Autel products, the Chinese government has more heavily restricted them both in one fell swoop.”
And now with Skydio turning even greater attention to its enterprise products, that might give yet another reason for enterprise customers to buy American over DJI.
America’s consumer arm has always been in trouble
Meanwhile, America’s consumer drone industry has long struggled to have any success building consumer drones over the long-term. Skydio, which was founded in 2014 (and in 2017 launched its first consumer drone, the R1), was the longest-running of them all.
Other examples of American camera drone makers that never stuck around include GoPro, which briefly sold a drone called Karma, which was plagued by a number of issues, including a major recall because Karma drones were falling from the sky. In January 2018, GoPro laid off between 200 and 300 employees, primarily from the GoPro Karma drone team. GoPro is very much still alive today making action cameras, but its drone days are likely over.
Another notable name was 3D Robotics, which launched its Iris drone in 2014 to negative reviews before ultimately burning through $100 million in funding and ultimately shutting down all of its manufacturing operations.
Most success stories involve pivoting from consumer to enterprise
“When Jeff Bezos said in 2013 on 60 Minutes that we’re all going to get drone deliveries in a few years, everyone got into the drone hardware business,” said Red Cat CEO Jeff Thompson at the Canaccord Genuity 43rd Annual Growth Conference earlier this week. “Then DJI came in and crushed almost every single one of them, and they all went out of business.”
Red Cat is an American drone giant that owns other subsidiaries including Utah-based Teal, which is known for its Teal 2 and $14,800 Teal Golden Eagle drones. But Teal didn’t always start out building military drones.
“The company we bought was limping along and — fortunately before they got completely crushed — they switched into defense,” Thompson said. That’s a reference to the Teal One drone, which launched in 2016 as a modular drone that was mostly intended for racing (and is no longer in production).
Red Cat has marked major successes, largely by pivoting into the enterprise and industrial side while shying away from the consumer side. In fact, Red Cat has actually sold off some of the consumer-oriented companies that once were in its portfolio. At the end of 2022, Red Cat announced that it would sell off its consumer division of FPV and hobby drones — which consisted of Rotor Riot and Fat Shark Holdings — to a company called Unusual Machines for $18 million (consisting of 5 million in cash, $2.5 million in a convertible senior note of Unusual Machines, and $10.5 million in Series A convertible preferred stock).
With this week’s news, it seems as though Skydio is following in the footsteps of Red Cat by killing its consumer offerings and instead going all in on military and enterprise products.
Thompson referenced exactly how challenging it is to run an American drone company, particularly one making consumer drones in his Canaccord speech this week.
“It’s a bloody place to go into, to convince people to invest in,” she said.
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