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DJI (Da Jiang Innovations Science & Technology Co) has taken the consumer drone market by storm, and its consumer drones are now a familiar sight around the world, recording everything from travel vlogs to Hollywood movies. As a result, the company is estimated by some to be worth $10 billion USD, and is sucessfully doubling sales every year.
For DJI, the secret to sucess has been one focus – drone market share. DJI has put this focus above all else, resulting in a litany of casulties. 3D Robotics? Out of the consumer drone business. Yuneec? Substantially smaller due to the competitive landscape. Autel Robotics? Substantially downsized as a result of the competitive landscape.
DJI has ensured that its drones offer a wide variety of features, and price points, to capture as much of the consumer market as possible. At the same time, they have vertically integrated drone manufacturing allowing them to cut out the middle man costs. They own stakes in various key component suppliers, such as a majority stake in their drone camera supplier Hasselblad which keeps costs down. Finally, they aim for a profit margin in the low single digits, ensuring no other competitor can offer a similar drone at a lower price point.
Distribution agreements with many companies worldwide, including in the Apple store have brought about brand awareness that previously did not exist, and allowed DJI to reach more consumers than the competition.
DJI (Da Jiang Innovations Science & Technology Co) is a private company. Therefore, it is not possible for the general public to invest in it. Only large investment banks can invest in private companies, and currently DJI counts Accel Partners, and Sequoia Capital among its main investors.
A similar situation exists with other private companies, such as Uber, where only private investors can invest before they proceed with an IPO.
An IPO, or an initial public offering is when a company sells its shares to the public on the stock market. After an IPO, anyone who opens the required accounts at their bank can purchase shares in the company. Alternatively, an app called Robin Hood exists in some countries, allowing users to much easily buy and sell shares in companies for no cost.
It is likely at some point in the future DJI will have an IPO and the public will be able to purchase shares. Since DJI is based in China though, an IPO on one of the Chinese stock markets would make it very difficult for the general public in the United States or other countries to invest in the Chinese drone maker.
Alternatively, there are a few other ways for the public to invest in the consumer drone market. One would be to buy shares in GoPro, currently listed on the NASDAQ stock exchange under “GPRO”. The other would be to invest in companies that provide the components, such as Intel, who recently bought the main chip supplier for DJI.
In the meantime, keep watching for any information on a DJI initial public offering.
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