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Can Xiaomi dominate the drone market?

How does Xiaomi do it? Feature-for-feature parity with market leaders, but at a fraction of the cost?

The Chinese manufacturer's products are, however, like the worst kind of teases. Showing you all the good stuff, but keeping you — if you live in the U.S. — at arm’s length, since the brand doesn't distribute many of its products here (though there are some). It’s a promise without fulfillment. Will the new Mi Drone be different?

Surely, the drone is Xiaomi’s best trick yet. The lightweight, "prosumer" drone matches virtually all of the key features of its main competitor, the DJI Phantom 4. The Mi Drone can fly for almost a half an hour, lets you send it to a point in the distance with a tap on the screen, plan routes, circle subjects while keeping them in camera view, fly up to 2 kilometers (1.25 miles) away, shoot 4K video and return home with a slide of a button (and automatically when it gets low on power).

The list goes on. The Mi only stops short of Phantom’s capabilities when it comes to obstacle detection.

However, the difference in price is extreme. The Phantom 4 costs $1,399 while the Mi Drone (4K model) costs just $457. And the Mi will be available with a 1080p camera for an incredible $380. Both come with a remote control. Going by what Xiaomi has said, aside from obstacle detection, there’s very little difference between what DJI and Xiaomi are offering.

If Xiaomi can bring the Mi Drone to the U.S. it could transform the enthusiast drone market.

iThat is, of course, a big if.

Xiaomi is huge in China, but gained its notoriety in the U.S. by teasing us with high-quality, low-cost phones like the Mi 5, basically a Samsung Galaxy S7 doppelganger that sells for $305. Mashable product review guy Ray Wong loved the handset, calling it a “stellar Android smartphone for an unbeatable price.” It's still almost impossible to buy it in the U.S.

It’s not entirely surprising that Xiaomi is now in the drone market. The company takes an unusual approach to products, identifying rising categories and fast-moving startups that can build new gadgets in those categories under Xiaomi’s guidance. Virtually all of the products are Internet-connected and plug into the larger Mi ecosystem.

During a live Mi Drone unboxing, Xiaomi International Marketing Head Hugo Barra explained why they built a drone. “Xiaomi exists as a company that loves to make awesome technology available to anyone. A drone is a good example of a product that is typically an expensive product for rich people.... We thought we could make the same kind of high-end tech with a lot of new features for an affordable price.”

Barra did an excellent job of walking thousands of live viewers through the new flier, even reveling a few things we didn’t already know, like the fact that it comes with propeller guards or that — more importantly — it can fold flat to fit in a backpack (the gimbal camera actually detaches to make this possible). These are features the DJI Phantom 4 drone actually can’t match.

Even so, Barra never talked about when it would be coming the U.S. market. He talked price but didn’t address availability.

Like the Mi phones before it, Xiaomi’s Mi Drone can’t rock the drone world unless it becomes a true global product. Not that they won’t do well in China. A recent IDC report noted that Chinese consumers see drones “as a trendy and in vogue product.” The IDC is expecting 423k camera drones to ship in China in 2016, which is up 100k over last year.

Xiaomi, though, has bigger aspirations. It’s not clear what’s holding it back from the U.S. markets.

Perhaps its concerns that the similarities between its products and U.S.-based ones could lead to legal trouble. During the Mi Drone unboxing, I took note of how similar certain parts of it were to the DJI Phantom 4, but I also noticed big differences, like the construction of the gimbal that houses the drones’ 4K 12 MP camera.

When we raised the concern about IP infringement on a recent MashTalk, a Xiaomi spokesperson was quick to correct us:

Perhaps the holdup is price. Can Xiaomi maintain these low prices in the U.S. market while still making a profit? Certainly the costs of shipping have to increase and any tariffs would have to be passed onto the consumer. Would there be too much frustration if a Mi Drone sells in China for $460 and in the U.S. for $600? That’s still a fraction of what it costs to buy a DJI Phantom 4.

If Xiaomi does make it to the U.S. market, sales of a sub-$400 prosumer drone will be brisk. Even at steeper prices and lower capabilities, the FAA anticipated U.S. consumers buying at least a million drones in the latter part of 2015. And that could lead to a whole new set of issues. Just as with DJI's Phantom drones, these Mi Drones will all need an FAA drone registration number (cost $5). Some people will do the right thing and get it, others will not. Either way, our skies will suddenly be polluted with drones flown by brainless pilots. Which will probably lead to even further crackdowns on our drone flying fun.

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