Can Insta360, which makes more money than Apple, withstand DJI's attack?
On September 11th, Insta360 addressed two major concerns of investors at its earnings briefing - the performance outlook for the second half of the year and the competitive impact from DJI. It gave a clear yet pressured response: "Against the backdrop of the accelerating technological iteration in the industry and the intensifying competition in the market, the company has proactively increased R & D investment in advance, strengthened market expansion and brand building, and simultaneously increased upstream supporting investment. This has led to an increase in corresponding expenses, and there are certain challenges to the company's performance in the short term."
Behind this response about the short - term performance challenges lies the intense emotional fluctuations in the capital market towards Insta360 over the previous month. On August 14th, as the company's panoramic drone brand "Antigravity" started its public beta, market enthusiasm was quickly ignited. The stock price then entered an upward channel, nearly doubling in less than 15 trading days, and the market value once exceeded 140 billion yuan.
However, the release of the first semi - annual report after the listing at the end of August poured cold water on this capital market frenzy.
The financial report shows that the company achieved a revenue of 3.67 billion yuan in the first half of the year, a year - on - year increase of 51.2%, indicating a rapid expansion in scale. However, behind the impressive revenue, the company's profitability has remained stagnant. In the first half of the year, the company recorded a net profit attributable to the parent company of 520 million yuan, a slight year - on - year increase of 0.25%. The net profit attributable to the parent company after deducting non - recurring gains and losses, which better reflects the profitability of the main business, was 490 million yuan, with a year - on - year growth rate of only 0.06%.
Due to market concerns about the company's profitability, during intraday trading on August 29th, Insta360's stock price fell by more than 8%. Although there was a slight rebound later, after September 3rd, it entered a continuous adjustment phase. As of now, the cumulative decline has exceeded 10%, and the market value has also declined, but it still exceeds 120 billion yuan.
Facing the huge gap between valuation and performance after the market frenzy, the market has begun to wonder: Does Insta360, standing at the "strategic crossroads of a high - growth enterprise", face potential risks? Can the fundamentals really support the company's high valuation of 120 billion yuan? More importantly, the strong competitor DJI is closely pressing - in the panoramic camera market dominated by Insta360, DJI launched the Osmo 360 as a competitor; when Insta360 entered the panoramic drone market, DJI immediately followed; when Insta360 pioneered the thumb - sized camera market, DJI also plans to imitate. From core product categories to emerging market segments, this "encirclement and interception" offensive strategy is gradually eroding the dividends that Insta360 has accumulated through its first - mover innovation.
The Battle to Defend the Market: Stabilizing the Basic Market in the Mixed - industry Competition
As the pioneer in the panoramic camera market, from the perspective of revenue structure, consumer - grade intelligent imaging devices, especially panoramic cameras, are currently Insta360's main source of revenue, and have long dominated the revenue. In the first half of 2025, the revenue from consumer - grade intelligent imaging devices accounted for as high as 86%. Therefore, it can be said that how to stabilize this basic market is the key to whether Insta360's future performance can continue to stabilize.
In terms of gross profit margin, Insta360's gross profit margin in the second - quarter report was 51.22%, while that of Apple, also a consumer electronics giant, was only 46.82%. From this perspective, Insta360 is more profitable than Apple!
Looking back at Insta360's development and growth, on the one hand, it is inseparable from the better product capabilities driven by technological innovation in anti - shake, AI image processing and other fields and the synergy of the software ecosystem under high - intensity R & D. On the other hand, the cost advantage of the complete domestic supply chain and the market share released due to the strategic mistakes of its competitor GoPro have also accelerated Insta360's rapid rise.
If we take 2010, when GoPro launched its first Hero HD action camera, and 2013, when Japanese company Ricoh launched the first panoramic camera, as the starting points, Insta360 and DJI launched their first benchmark products in 2018 and 2019 respectively. In the following six years, domestic brands caught up with and even surpassed overseas brands in terms of product capabilities and brand influence, completing the first round of domestic substitution in the handheld intelligent imaging device market.
In the past, the industry competition was mainly within the panoramic camera market dominated by Insta360 and the action camera market dominated by DJI. However, with the launch of Insta360's Ace Pro and Go series, the industry competition has shifted to a mixed - industry competition for generalized action cameras. At the end of July this year, DJI launched its first panoramic camera product, launching a counter - offensive against Insta360's basic market.
Can Insta360 maintain its high profitability?
(1) In the mixed - industry competition, Insta360's biggest competitor has shifted from overseas brands GoPro and Ricoh to domestic brand DJI. This shift is particularly worthy of attention. Although DJI has shown signs of weakening innovation in recent years and has changed its previous innovative image by repeatedly entering mature product categories across different fields - moving from the "sky" to the "ground" market, and its products have often been labeled as "lacking innovation", it still shows strong market aggressiveness in parameter comparisons and price wars due to its supply - chain advantages and brand premium.
Its panoramic camera Osmo 360, launched at the end of July this year, was also criticized for "lacking originality". Its functional design is highly similar to Insta360's X5, but it still achieved a market performance of being out of stock on the first day of sales thanks to the "DJI halo". As Insta360 launched the public beta of its panoramic drone, DJI quickly launched a similar product, forming an obvious "encirclement and interception" situation. It can be seen that DJI's overall product launch rhythm closely follows Insta360's. This "tactical follow - up" is DJI's consistent breakthrough logic - by quickly replicating the mature product forms of its competitors and then leveraging its supply - chain advantages to gain an edge later. This strategy has been fully verified in its drone development history.
Considering that the two companies have many similarities in terms of technology reserves and sales channels, in the future, DJI is likely to seize market share through more aggressive price wars or faster product iterations. Once this expectation is realized, it will surely put pressure on the industry's gross profit margin and severely squeeze Insta360's profit space. Facing such a competitor, Insta360 will face a severe challenge of having its market share in the panoramic camera market gradually eroded.
Chart: Comparison of the main product distributions between Insta360 and DJI. Data source: Cinda Securities, compiled by 36Kr
In addition, considering that the main battlefield of the generalized action camera market has shifted from overseas to the domestic market, the similar brand influence of the two companies in the domestic market is also a factor that will intensify future competition. The relatively low pricing in the domestic market may also cause long - term fluctuations in the gross profit margin.
Chart: Comparison of the regional growth of global panoramic cameras and action cameras. Data source: Guosheng Securities, compiled by 36Kr
(2) Even with an absolute monopoly advantage, leading brands are not very willing to cut prices to seize market share. However, the intensification of mixed - industry competition means that for leading brands to maintain their leading positions, they not only need to spend more on R & D to maintain leading product capabilities and iteration speeds but also need more marketing investment to educate the market. Ultimately, this will lead to an increase in the company's R & D and marketing expenses and accelerate the decline of the profit center.
Taking R & D expenses as an example, since 2024, as the company entered a new product launch cycle, in addition to vertically upgrading its advantageous product category, the panoramic camera, it also increased innovation in fields such as action cameras and lightweight wearable cameras. This year, it successively launched popular new products such as the panoramic camera ONE X5, the action camera Ace Pro2, and the pocket camera GO Ultra, and continuously improved its software ecosystem. At the same time, judging from the disclosure of ongoing R & D projects, it currently includes at least more differentiated exploration in segmented fields such as lightweight wearable jewelry cameras and handheld portable Vlog cameras.
The acceleration of product and category innovation has led to a rapid increase in R & D expenses. From a trend perspective, since 2022, the growth rate of Insta360's R & D expenses has significantly accelerated, remaining at a high level of over 70% for a long time. In the first half of this year, it reached 560 million yuan, with a year - on - year growth rate of over 100%, and the R & D expense ratio also increased by 3.75 percentage points.
At the same time, combined with the disclosure of R & D project investment in the financial report, the company's relevant R & D expenses (excluding salaries) in traditional fields such as panoramic cameras and action cameras in the first half of the year were already close to 250 million yuan, equivalent to 50% of the current profit.
Chart: Insta360's ongoing R & D projects and investment. Data source: The company's semi - annual report, compiled by 36Kr
Indeed, as an innovation - driven company, Insta360's core growth model is to continuously improve product capabilities through innovation, gain market share with internationally leading products and technologies, drive rapid expansion of revenue scale, and achieve stable profitability through economies of scale.
However, with the intensification of competition, the continuous surge in R & D expenses will undoubtedly put continuous pressure on profits, increasing the risk of the company's revenue growth without corresponding profit growth, and thus intensifying the fluctuations in performance and the market.
The Battle to Expand the Market: A High - risk, High - investment Game
Although Insta360 launched the world's first panoramic drone as a "category definer", after reaching the peak in its traditional business, the multi - front competition situation of its second growth curve has become an important factor restricting its future growth.
In the new financial report, the company's plan for the second growth curve is clearer than at the beginning of its listing. That is, by deploying innovative products such as intelligent wireless audio devices and panoramic drones, it aims to break through the ceiling of the traditional business and expand the incremental market.
Insta360 started its layout in the drone field five years ago. At the end of July this year, it jointly incubated a sub - brand of panoramic drones, "Antigravity", with a third - party. Relying on its differentiated product development concept, it further strengthened the market's expectation of Insta360's high - growth potential.
Strategically, the advantage of panoramic drone products lies in their greater potential space, which can further expand Insta360's scale limit.
According to the view of Cinda Securities, the global aerial - photography drone market was worth approximately 7.1 billion US dollars in 2023. Valuates Report predicts that it will further increase to 12.2 billion US dollars by 2030, with a compound annual growth rate of about 7.6%. Among them, DJI's market share exceeded 70% in 2024. If Insta360 can achieve a 10% market share in 2030 through differentiated competition, the corresponding incremental revenue space will be about 5 billion yuan. Based on the 2024 level, it is equivalent to recreating an Insta360.
From a performance perspective, Insta360's panoramic drone product is still in the public beta stage, and the mass - production problem has not been completely solved, so it has not generated actual revenue yet. Even if it enters the mass - production stage in the future, there is still great uncertainty as to whether this new product can break through in the market under DJI's monopoly advantage.
This uncertainty largely stems from DJI's strong control over the drone market. Although in recent years, its core flight control and imaging systems have not achieved breakthrough upgrades for a long time and are often referred to as "incremental innovation" in the industry, stimulated by Insta360's competition, DJI quickly responded. Two months after Insta360 launched the public beta of its panoramic drone, DJI also announced the launch of a similar product.
Behind this competition lies a deeper market contradiction: on the one hand, consumers who have long been restricted by DJI's monopoly are "sick of DJI for a long time" and eagerly hope that Insta360 can break the market deadlock through differentiated innovation. On the other hand, DJI still firmly controls the dominant position in the drone market with its strong brand premium, supply - chain advantages, and closed - loop ecosystem. The game between the two companies is not only about the ebb and flow of market share but may also reshape the entire industry's competitive landscape. The key variables in the future market are: Can DJI continue to maintain its monopoly position with its brand advantage, and can Insta360 break through through real differentiated innovation?
But currently, it is certain that the cost and expense investment in emerging products will precede the performance. Judging from the information disclosed in the semi - annual report, the planned direct R & D expenses for Insta360's panoramic drone product and the related perception, navigation, and obstacle - avoidance system are as high as 610 million yuan (excluding personnel salaries), and the actual investment in the first half of the year exceeded 170 million yuan (excluding personnel salaries). If we add the surging marketing expenses during the subsequent new - product promotion stage, it may mean that in order to successfully build the second growth curve represented by panoramic drones, Insta360 will inevitably need to sacrifice profits in the short term to achieve a breakthrough in this business. In other words, Insta360 needs to use part of its current profits to bet on a second growth curve that is not 100% certain in the future.
Chart: The company's ongoing R & D projects and investment related to drones. Data source: The company's semi - annual report, compiled by 36Kr
In this context, it becomes very important to balance the relationship between short - term profitability and long - term performance growth in the future.
In fact, both Insta360 and DJI are facing the bottleneck of slowing growth in their original businesses. Although seeking a second growth curve and promoting business expansion seem logically consistent, looking back at past industry cases, this process is prone to slide into blind diversification. Once a company blindly expands into multiple fields and squeezes a large amount of resources, in addition to the market fluctuations caused by the decline in short - term profitability, it may also lead to insufficient innovation ability in traditional advantageous businesses due to the withdrawal of resources.
As a company with a consumer + technology