By: Garrett Reim
Read the full article on the LA Business Journal website.
Los Angeles, CA — December 1, 2017 — Entrepreneurs looking to enter the fast-growing commercial drone sector are finding it tough to compete as low-cost models from China dominate the market.
But there are other drone-related manufacturing plays that can spell success to businesses here.
Case in point: Phoenix LiDAR in Palms ditched its efforts to build quadcopter drones several years ago after realizing it couldn’t compete against existing manufacturers, such as DJI of Shenzhen, China, which now has an estimated 70 percent share of the civilian drone market that is projected to grow to more than $100 billion annually.
Phoenix, which employs 26, rearranged its operations to solely manufacture light-weight, drone-mounted LiDAR sensors, a laser-based surveying tool similar to radar used to create 3-D maps of topography, power line infrastructure and construction sites. The company is burrowing deeper into its LiDAR niche with plans to release next year cloud-based software for calibrating and analyzing LiDAR data, according to its co-founder and Chief Executive Grayson Omans.
“We just decided to focus purely on how we can improve LiDAR, the processing of the data, and all the different packages for these different applications,” he said. “We’ve barely scratched the surface of this.”
While the technology is nascent, there’s lots of money on the table. Phoenix’s sensors cost between $50,000 and $250,000. The company’s shift away from drone manufacturing and towards specialized sensors is already bearing fruit. Last year the firm generated about $5 million in revenue and this year it is on track to double its sales. The five-year-old company has taken no outside funding, Oman said.
Phoenix’s business took off last year when the Federal Aviation Administration introduced Part 107, a new regulation which allowed personnel to fly drones for commercial use with a remote pilot airman certificate, a classification easier to achieve than a full-fledged pilot’s license.
“There was a long R&D phase, but as soon as Part 107 came out from the FAA and unlocked the U.S. market we saw a huge need for LiDAR,” said Omans.
Demand for the technology by everyday personnel is still limited by its complexity, however, said Omans. The company aims to solve that by automating much of the LiDAR calibration and analysis process with its forthcoming subscription-based software, which will cost $550 a month to $800 a month.
“At the end of the day collecting the data, is really the easy part,” said Andrew Aubrey, chief executive of SeekOps, a drone-mounted methane sensor manufacturer in Pasadena. “It’s having the expertise to process that data, and reuse that data, and turn it into actionable information, which is a huge part of the value chain.”
Omans envisions the task of flying drones, as well as collecting and analyzing data, will ultimately be completely automated and will allow drones to operate far beyond a human’s field of view.
“A lot of our utility customers’ line of site is maybe 5 power poles. They want to go miles and miles,” he said.