Internet & Tech

The predator – or the prey?

Dronemaker DJI in new bid to win over government clients in the US

DJI-w

An aerial threat to the US...

DJI, the world’s top drone brand, grabbed headlines this week when a man filming his family at the beach in Florida suddenly realised that a shark was circling his kids.

The footage shows them splashing frantically out of the water, with the shark just a few feet further out to sea.

Paradoxically DJI has been the one feeling hunted in American political circles over the last few weeks, following a warning from the Department of Homeland Security in May that companies were risking their data security by operating Chinese-made drones.

There was more hostile coverage at a hearing of the US Senate last month, which discussed DJI’s “near monopoly” on drone technology marketed in the US.

That dominance isn’t just in how the drones fly but also in the way they take photos and retain data, warned Harry Wingo, one of the expert witnesses. “American geospatial information is flown to Chinese data centres at an unprecedented level. This literally gives a Chinese company a view from above of our nation,” he claimed.

DJI reiterated that its drones don’t share any data unless the pilot expressly authorises it. “They do not automatically send flight data to China or anywhere else,” it insisted. “This data stays solely on the drone and on the pilot’s mobile device.”

However, the Shenzhen-based giant seems to have accepted that actions will speak louder than words in winning over more of the American market, especially among clients from the public sector.

Last month it announced that it would be repurposing one of its warehouses in California as an assembly plant for a new version of a drone that’s popular with federal and local government agencies. By putting it together on American soil, it hopes to meet the stipulations under the Trade Agreement Act, which restrict some government agencies to purchasing products made in the US. Most of its existing government customers have been relying on waivers to circumvent the trade law. However, DJI is worried that the tech row with Washington is changing the mood and it that it could be barred from selling to government agencies without fuller certification.

In another bid to reassure its corporate customers that it isn’t spying on them, DJI is promoting a new operating mode called Government Edition, which prevents its drones from transferring data to third parties or back to DJI itself.

It says that the protocols mean that information can only be transmitted to controllers specified by their operators, although whether this wins over an increasingly suspicious political audience remains to be seen.

DJI’s high profile in the US is a mark of its commercial success – the estimates at the Senate subcommittee were that it accounts for 70% of drone sales worldwide. But sales to hobbyists haven’t been growing as fast as before: enthusiasts don’t make new purchases every couple of years as they might with their smartphones and DJI knows it needs to look more to companies and the public sector as future customers.

Analysts have already detected some of that shift in the fact that DJI hasn’t launched a new recreational product so far this year, while the industry talk is that more of the profits are going to come from sales of software and services as the market matures, and less from hardware.

That is going to bring customers who are much more cautious about how their information is transmitted and stored, putting pressure on DJI to prove that it has ring-fenced their data. The public relations war is already being waged. The US military banned operation of Chinese-made drones two years ago but a letter to the subcommittee highlighted how other state agencies were relying on them to save lives. In one case, police in New York deployed a DJI drone to defuse a stand-off with a gunman. In another case in California the police put up a drone to find a lost boy. And in a third, park wardens in Texas used one to find two missing kayakers.

 

 

 

 

 

 

Keeping track, Jul 12, 2019: Last week WiC reported that DJI was taking political flak in the United States on fears that its drones would send confidential footage back to home base in Shenzhen and damage American national security. The world’s leading drone maker has always denied this could happen, but it has also introduced a more secure ‘Government Edition’ range to further reassure its public sector clients. There was good news on Tuesday when the Chinese dronemaker announced that two of its models intended for government usage had passed tests by the US Department of the Interior (DoI). The drones were tested for 15 months, with no indication that data was being transmitted outside the system, confirming that they were operating as promised, the DoI said. Executives from DJI were soon celebrating the news, although there were important caveats to the findings, including “that observed test results cannot be extended to future DJI Government Edition software, firmware, or hardware updates”. That seems to suggest that all future updates to the drone range will have to be verified anew, with the DoI concluding that the costs of all this testing means that Government Edition “does not represent a long term, sustainable solution…” One step forward, then, but another one back. DJI will be better pleased with another of the DoI’s findings: that there are no American alternatives that are competitive in price and performance to the two types of drone that were tested.


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