FAA drone regulations (AMBA)

Came across this link in another board. Maybe drones will be ramping up faster than anyone thought for AMBA. I would imagine the % of drones that need to be video capable would be low, but if the market explodes that low % could still possibly move the needle.

Ray

From the article:

(Reuters) - U.S. commercial drone operations could take flight on a large scale by this time next year, as federal regulators finalize rules allowing widespread unmanned aerial system use by companies…

…“The rule will be in place within a year,” FAA Deputy Administrator Michael Whitaker said in testimony before the U.S. House of Representatives…

…Drone advocates expect unmanned aerial systems to transform a number of industries - from agriculture and energy production to real estate, news and entertainment, transportation and retailing.

http://www.reuters.com/article/2015/06/17/usa-drones-congres…

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My biggest concern for AMBA in drones is the mass production market.

Like drones and 3D printing, it is a cool technology, yet easily made for less and less these days.

You have a cool, hi-tech drone(3D printer) that cost so much money. Soon someone else sells a drone (3D printer)that basically seems to be just as cool. Only it doesn’t do everything the expensive one does, but it is “good enough for what I need it to do” mentality. I’ll just buy the less expensive one. Obviously brand name and quality still apply, I just feel it is lessened by the casual buyer, of which most people probably are.

That leads to drop in cost and the use of some other company’s camera/chip for instance. Maybe big sales at first, that seem to peak right away and start slipping down and down.

Of course I could be wrong, just a thought.

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The issue is not one of functionality, quality, durability, etc. Rather, it’s the consumer’s perception perception of functionality, quality, etc. How do you get the last link in the value chain to discriminate and pay attention to the guts of a drone?

Remember Intel’s marketing that emphasized “Intel Inside” with branding on the outside of the PC. In fact, the HP device I’m using right now has decals on the keyboard identifying CPU (Intel), the OS (Windows 7 - now Windows 10) and the graphics processor (Radeon).

If Fermi Wang institutes an aggressive marketing plan they could achieve similar brand awareness by the end consumer. To that end, I recently posted the following note to the “Contact Us” page of Amberella’s investor’s section of their web site.

As an investor with a substantial percentage of my portfolio in Amberella I would hope to see this company succeed in the face of inevitable lower cost competitive products.

In order to effectively compete I think it’s imperative that Amberella cultivate brand awareness and a perception of greater value as perceived by the end consumer of products containing video functionality. I am reminded of Intel’s aggressive marketing of their trademarked branding of “Intel Inside”.

The products bearing this decal were perceived by the consumer as having the pinnacle of quality, functionality, dependability and all the other “itys” of importance.

I would hope that Amberella adopt a similar branding strategy such that consumers seek products with Amberella components.

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Came across this link in another board. Maybe drones will be ramping up faster than anyone thought for AMBA. I would imagine the % of drones that need to be video capable would be low, but if the market explodes that low % could still possibly move the needle.

It is already moving the needle quite a bit for AMBA. Drones (AMBA management calls them flying cameras) already make up 10% of AMBA’s business. On the most recent earnings call, they said that they expect strong growth from flying cameras. I have strong doubts about GoPro’s continued success. I have had a GoPro now for about 4 months and I have never once used it. I have a friend who has a GoPro (for over a year) and he’s used it twice. I wonder how many other people don’t really use their GoPro. If a significant number of people who own a GoPro don’t use it then sustainable growth may be not happen. Despite these doubts, I still have a significant position in AMBA. I think that growth in AMBA’s other end user markets will be enough to my AMBA a good investment even if GoPro sales begin to decline.

Chris

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I would imagine the % of drones that need to be video capable would be low

It would be 100%, or close to. That’s the whole point of a drone.
Saul

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I think the market for “flying cameras” is HUGE. The number of people using a GoPro to video their bungee jump is small, but the uses for aerial photography/videography are numerous:

  • Farmers and ranchers can inspect their property, livestock, and crops remotely.

  • Border patrol agents, park rangers, and fire control officers can enhance their surveillance capabilities greatly.

  • Traffic conditions can be better monitored and adjustments to signals and signage made easily to improve flow

  • Power transmission lines and gas pipelines can be inspected and monitored

  • Cell towers, microwave towers, and smokestacks can be inspected without sending a man up the ladders

  • Hazardous locations (inside the containment dome of nuclear plants, building fires, etc.) can be viewed and monitored remotely. Searching for people trapped in buildings on fire just got a lot safer

  • Monitoring the coastline for illegal drug traffic will be enhanced

The market seems large, and barely tapped. I could see every police department, fire department, park service, border patrol station, utility provider, and coast guard ship having at least one drone. And those are only “official” uses. I am interested in buying a drone to help me in my quest for trophy bass… I could send it out over an unfamiliar body of water in search of underwater structure, shad boils, or other indicators of where I should be fishing.

Tiptree, Fool One guide, long AMBA

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The market seems large, and barely tapped. I could see every police department, fire department, park service, border patrol station, utility provider, and coast guard ship having at least one drone. And those are only “official” uses. I am interested in buying a drone to help me in my quest for trophy bass… I could send it out over an unfamiliar body of water in search of underwater structure, shad boils, or other indicators of where I should be fishing.

That is serous. Bass Fisherman are crazy. 60k for boat, 80 k for a rig to pull the boat. Yeah. Crazy.

Cheers
Qazulight

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Drone usage has built my confidence in AMBA.
Unlike consumer usage, where lower price can overcome lack of high end features, for drones to be meaningful, i would think they need better resolution and fast enough processing.

If I remember right, HISILiCON and one other company is capturing low end market strongly for consumer cameras. However, they are far behind on high end… Which bodes well for AMBA.

It’s still a semiconductor company, I wouldn’t go overboard, but for now it seems like a safe bet due to pick up in drones.

Sub-hunting helicopters are equipped with “dipping sonar”. Will bass-hunting drones follow that that approach too?

:sunglasses:

Last year at the Farm Implement show in Fargo, there was a farmer giving talks on how he had used drones to improve his crops. He used it to identify areas that were missing fertilizer or weed killer.

When you have crops that run in the millions of dollars gross, the 5 or 10 percent loss from spotty applications of chemicals can kill your profits, or the proper application can double them.

The same goes for commercial fishermen. In the Gulf they paid pilots to spot the birds then they shrimpers would move in. With drones they can cut that out.

Finally, we haven’t even touched on AT&T’s connected home coupled with face recognition software. For face recognition you need high resolution in all types of lighting. With face recognition you do not need keys, and you can raise alerts for unwanted guests, think ex-husbands and so on.

This would work in secured apartment buildings also.

Cheers
Qazulight

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I would imagine the % of drones that need to be video capable would be low

It would be 100%, or close to. That’s the whole point of a drone.
Saul

I meant this to be % of drones that need to be high end video capable to be low. No edit feature here in MF land. I just don’t think that many of the applications “need” to be as high quality as AMBA provides. Then again when spending a few thousand dollars on a drone people may demand that quality to justify the cost.

Ray

I just don’t think that many of the applications “need” to be as high quality as AMBA provides.
What are they going to put up there? Black and white polaroid photographic cameras? It makes no sense for the most state of the art disruptive invention to be loaded with yesterday’s tech.
Ant

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The point of cameras on drones is to get information.  Funny thing about information is that it is time sensitive.  People want information and they want current information and that want it now (or sooner).  The better the resolution, the more likely the flight will get the information (maybe low light, deteriorating weather, shadows). Of course the drone has the advantage of real time or near real time display and the ability to hover and loiter so that is more forgiving.

Just my opinion

ex recce puke,

KC
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"I just don’t think that many of the applications “need” to be as high quality as AMBA provides. "

High quality is exactly what is needed. On my DJI phantom with a gopro on medium angle and 1080, even at 100 feet people are starting to look like ants. If one is trying to hone down on crop for signs of disease, or an ocean for signs of a survivor at sea then you will absolutely need high quality. 4K helps but at 30fps would be too jumpy to evaluate.

As to the prior thread about go pro and how much it will be used: I use my gopro to record my family skiing, my scuba adventures and attached to my DJI phantom HOWEVER there is only so much footage that can be filmed and family and friends rapidly lose interest in following my youtube adventures and so while it is a great camera I am not sure how much more utility it will have as time goes on.

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An interesting news story hit the local business paper today. The larger university in my town has an aviation degree program. They recently started offering a minor in “Unmanned Systems” – Drones. Now, they are going to offer a major in that subject.

http://www.ibj.com/articles/54749-indiana-state-launches-dro…

There is some interesting data in the story about drones and their anticipated uses. But this line caught my eye:

Baker said he expects the drone industry to generate 110,000 jobs in the next 10 years and grow from a $3 billion industry in 2013 to $110 billion by 2025

They expect this industry to explode by a factor of 36 in twelve years. That is over five doubles… or a double just over every couple of years. If AMBA can be a part of that growth cycle… Wow. Just. Wow.

Tiptree, Fool One guide, long AMBA

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