The global panoramic camera and drone markets are witnessing unprecedented competition, as emerging Chinese hardware brands challenge established industry norms.
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Recent reports from JQ Consulting and Frost & Sullivan have sparked debate by presenting diverging data on market shares for two of China’s most prominent international brands—DJI and Insta360—underscoring the intensifying rivalry between these firms.
Both companies have long dominated their respective niches through deep integration of hardware and software. Recently, however, DJI and Insta360 have ventured into each other’s traditional markets, releasing new products that test the boundaries of their capabilities.
This expansion exemplifies China’s evolving approach to global competitiveness: leveraging software engineering strengths, supply chain advantages, and AI-driven hardware-software collaboration to secure leadership positions on the world stage.
The Rise of Integrated Hardware-Software Leaders
DJI’s journey began with solving core technical challenges in drones, such as automated hovering and stable flight. Early development focused on translating complex algorithms into precise control over motors and propellers. Through rigorous software development, DJI implemented features like visual obstacle avoidance, intelligent tracking, autonomous route planning, high-definition image transmission, and anti-shake stabilization, underpinned by advanced computer vision, SLAM (Simultaneous Localization and Mapping), and other AI-driven algorithms.
Yet software alone could not define DJI’s global leadership. The company needed to “harden” its algorithms into compact, reliable, mass-producible hardware. Consumer drones consist of 2,000–3,000 components integrated into devices only slightly larger than a human palm—a monumental engineering challenge. DJI independently developed over 4,000 patents for components including chips, motors, ESCs, propellers, and gimbals, achieving unmatched synergy between software intelligence and hardware precision.
This hardware-software synergy extended beyond drones to DJI’s Osmo series of handheld stabilizers and action cameras, paving the way for the company’s entry into panoramic cameras. The strategy demonstrates how mastery in one domain can catalyze cross-industry expansion.
Insta360 followed a parallel path in the panoramic camera industry, with founder Liu Jingkang leveraging software expertise to disrupt global norms. A software graduate from Nanjing University, Liu first gained attention as a “tech genius” capable of complex software exploits. Dissatisfied with the limitations of early video streaming technologies, he envisioned a panoramic camera capable of VR-ready footage at the press of a button, launching the foundation for Insta360.
Insta360’s early years combined hardware assembly in Shenzhen with software development, leading to breakthroughs like 3D panoramic stitching algorithms, which merged fisheye footage into cohesive VR panoramas. The release of the Nano camera marked the brand’s mainstream debut. Subsequent innovations, including FlowState stabilization, Invisible Selfie Stick, ultra-wide lenses, and AI-assisted editing, culminated in the globally popular Insta360 ONE X, surpassing GoPro in market share.
In August 2025, Insta360 leveraged this software-hardware foundation to launch its Antigravity A1 panoramic drone, directly challenging DJI’s core market. These cross-industry maneuvers demonstrate how accumulated expertise in software-defined hardware can serve as the launchpad for global expansion.
Beyond DJI and Insta360, a new wave of startups is capitalizing on AI hardware integration to address niche market needs. Plaud, for instance, reimagined the voice recording and transcription sector by embedding large language models directly into its hardware workflow. Launched on Kickstarter in 2023, Plaud raised $1.1 million in its first month and became an Amazon Best Seller in 2024, generating annual revenue exceeding 700 million yuan. Its founder, Xu Gao, projects 2025 revenue of $250 million, demonstrating how AI can revitalize overlooked hardware segments.
Similarly, XbotGo targeted the sports video market, creating an AI sports camera for tracking children’s games—a previously neglected B2C segment dominated by DJI, Insta360, and GoPro. The company’s third-generation Falcon | 4K AI Tracking Sports Camera raised over $2 million on Kickstarter within a month, illustrating sustained consumer interest driven by software-hardware innovation.
Another noteworthy case is Halliday Glasses, developed in partnership with Gyges Labs and backed by GSR Ventures. The AI-powered eyewear achieved an oversubscription rate of 6,861% on Kickstarter, raising $3.3 million in just two months. Its core innovations include the Digiwindow near-eye display module, shrinking optical hardware for comfort, and the Proactiva.AI engine, capable of proactively anticipating user needs—an emerging differentiator in AI-native wearable devices.
Challenges in Becoming a Global Contender
While opportunities are vast, several hurdles persist for emerging AI hardware companies.
1. Scaling production and supply chains: Crowdfunding success is only the first step. Delivering products at scale requires robust manufacturing, quality control, and supply chain management. DJI’s early experiences with the Mavic Pro highlight the potential pitfalls of mismanaged demand surges, resulting in severe shortages and reputational risks. Founders like Ke Feng Tan (XbotGo) stress that supply chain execution remains the biggest challenge, even for third-generation products.
2. Organizational and managerial integration: Hardware engineers and AI/software developers often operate with divergent mindsets. Aligning these teams is critical for translating technology into marketable products. As Mo Zihao (Plaud China) notes, “software iteration is relatively easy, but hardware requires managing weaknesses to minimize risk.” Insta360’s ONE X launch illustrates this challenge: the team delayed its release until the stabilization algorithm reached maturity, prioritizing product quality over schedule.
3. Market fit and sector ceiling: Successful hardware must address real customer pain points and operate in markets with sufficient scale. Many AI toy companies, for example, have suffered high return rates—up to 35% compared to 15% for traditional toys—despite heavy investment. For Insta360, despite 80% market share in panoramic cameras, global market size (~10 billion yuan) limits growth. Expansion into drones and other sectors is a strategic necessity to sustain revenue and profitability.
The competition between DJI and Insta360, alongside breakthroughs from Plaud, XbotGo, and Gyges Labs, signals a new era in AI-driven hardware. Software-hardware integration is no longer a differentiator—it is the prerequisite for global competitiveness.
Global ambitions now demand resilience across multiple dimensions: rapid technological integration, agile supply chains, and ecosystem development. To evolve from a single-product company to a multi-category technology platform, firms must overcome the “three mountains” of production scale, organizational synergy, and market ceiling navigation.
As the AI hardware cycle accelerates, only brands capable of mastering cross-sector innovation, maintaining global execution, and sustaining software-hardware synergy will dominate. The future of the industry will favor “all-rounder” companies, able to balance R&D, production, market expansion, and ecosystem building—ensuring they remain at the forefront amid rapid technological and competitive shifts.
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