If you’re aware of the drone ecosystem then you’d be very well aware that China’s DJI is leading the race. Due to the same, Parrot, a French drone manufacturer is cutting down its drone-related division by a third to streamline operations. This move, which has been announced in the company’s Q4 earnings, comes on the heels of it missing the sales estimates by 15 percent.
With regards to the same, around 290 people of the total 840 staff members currently working in the Group’s Drone activities will be shown the door. This will effect not only personnel in France but also internationally. The company states that low margins in the consumer drone space is one of the major reason for layoffs. Parrot is assigning over 45 million euros towards the overall cost of transition, which has been detailed underneath.
Towards the end of November, Parrot has set some pretty high goals for itself — in terms of sales and revenue. The company had expected to rake in over 100 million euros by the end of 2016. But due to lacking sales of its commercial drones, it was able to bring in just more than 85 million euros this year. The consumer drones, however, performed well and generated 49 million euros in revenue.
Parrot has always tried to produce unmanned affordable toys for consumers but has failed to capture the interest of the masses. Now, Parrot plans to align itself as well as its resources with respect to the business achieved last year. Thus, in 2017, the company will refocus its product offerings and build drones capitalizing their areas of expertise (which isn’t obviously the camera). It will also reduce production and instead focus its resources of imbibing innovation into its drone products.
The competition in the drone industry has intensified over the last couple of years, with DJI taking the lead in both the commercial and the consumer UAV space. Parrot has tried to tread the line in the middle with the release of easy-to-use, consumer-friendly Bebop drones but it hasn’t been able to gain traction. For which, the primary reason could be lacking optical specs, software support, and sub-par hardware.
The game has recently also been joined by Go Pro, who unveiled its Karma drone earlier in 2016. This ushered the era of handy, and foldable drones alongside the release of the DJI Mavic Pro — which fits in the palm of your hand. Now Parrot needs to buckle up and hit the ball out of the park if it plans to stay afloat.
