California’s commercial drone industry is taking off

Press

As the largest American maker of consumer drones, 3D Robotics Inc. sees big opportunities in selling mini-helicopters with cameras, sensors and whirling propellers that buzz like angry hornets.

The Berkeley company expects to sell thousands of the pizza-sized drones — for about $1,000 each — at home and abroad this year. Tech-savvy customers want them for capturing wave-shredding surfing runs in the Pacific, monitoring oil and gas pipelines in remote regions, and other uses.

3D Robotics is out in front of dozens of California companies jumping into the nascent business of selling drones to consumers and commercial enterprises, just as companies in the state did earlier when the drone market consisted largely of one customer: the Pentagon.

Although military drones were born in Southern California and are still built here, 3D’s drones will be built outside the country.

So far, many commercial and civilian drones are being designed here but made abroad, creating high-tech engineering jobs in the U.S. while the manufacturing is in low-cost countries like China and Mexico — underscoring the challenge of creating U.S. manufacturing jobs.

The epicenter of the fast-growing commercial drone business is in Silicon Valley, not Southern California, and the new players are quite different from the giant contractors that dominate the military drone market, such as Northrop Grumman Corp. or General Atomics Aeronautical Systems Inc.

They’re more like the classic Silicon Valley stereotype: geeks working in garages.

“The aerospace industry isn’t relevant here,” said Chris Anderson, 3D Robotics’ chief executive. “What we do is more like a smartphone with wings rather than a pilot and a plane.”

Many of the commercial drone companies are so new that it’s hard to predict where they will locate manufacturing operations, but they are unlikely to create thousands of well-paying factory jobs, like the aerospace industry of a bygone era.

Competition from Chinese manufacturers has already pushed 3D Robotics and some other American drone companies to make their hardware in other countries. Anderson’s company has an engineering center in San Diego, but manufactures its drones in Tijuana and Shenzhen, China, where there is cheap labor.

The strategy mirrors that of Apple, which designs its iPhones in California but manufactures them in China and other countries.

3D Robotics’ main competition is Chinese company SZ DJI Technology Co., the largest commercial drone manufacturer in the world. The firm makes the red-and-white quadcopter called the Phantom, which recently gained fame when one landed on the White House lawn.

“We’re California. We’re a high-cost state,” said Colin Snow, a drone industry analyst in Redwood City. “Capital goes where it gets the highest return.”

http://www.latimes.com/business/la-fi-drones-20150614-story.html#page=1