Here's what to make of Snap's drone play (SNAP)

pulse

August 3, 2017 2:51 PM

Snap Inc., the parent company of Snapchat, is reportedly in talks to buy Chinese drone manufacturer Zero Zero Robotics for between $150 and $200 million.

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Snap Inc., the parent company of Snapchat, is reportedly in talks to buy Chinese drone manufacturer Zero Zero Robotics for between $150 and $200 million, according toCNBC.

Zero Zero is known for its $500 Hover Camera Passport drone, a lightweight drone specifically designed for taking selfies.

This isn't Snap's first move into the drone market — earlier this year itboughtCalifornia-based drone startup Ctrl Me Robotics and The New York Timesreportedin March that the firm was working on building its own drone in-house — so it's possible the firm is trying to build out a team of industry veterans to move further into the space.

While Snap brings some advantages to the table, right now it appears unlikely it'll carve out a large share of the consumer drone market.

Snap's young, engaged user base might buy a drone if it made one.
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But DJI's dominance will likely make it exceedingly difficult for Snap to break into the space.
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But if Snap does break into the market, the potential payoff could be large. Consumer drones right now are primarily owned by tech-savvy consumers hungry for the latest gadgets, but that'll change in the nest few years — global consumer drone spending will total $13 billion between now and 2020, according to Goldman Sachs. That means that if Snap can release a drone soon and carve out a share of the space, it could prove to be lucrative for the company as the market scales rapidly in the next few years.

Peter Newman, research analyst for BI Intelligence, Business Insider's premium research service, has conducted an exclusive study with in-depth research into the field and created a detailed report on the IoT that:

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