China's drone market: 5 things to watch out for

China drone shipments to hit 3M by 2019

The sky's the limit for drone makers looking to tap into China's nascent drones market, with a research firm forecasting an over seven-fold increase in camera drone shipments over the next three years as the devices gain wider usage.

Research firm IDC recently said it estimates camera drone shipments in the Chinese mainland to hit 3 million units by 2019, up from their prediction of 390,000 shipments in 2016.

Jean Xiao, research manager at IDC China's Client System Research Group, told CNBC by phone, "Currently we can see that most drones in the Chinese market are used for photography. They are mainly applied in areas of media and consumer entertainment."

She added in the near future with necessary technology development and government policy support, "drones will have various vertical applications in areas of agriculture, education, transactionals, and more."

China is already home to prominent Shenzhen-based consumer drone maker DJI, which had a 68.5 percent market share for camera drones in the mainland in the third quarter of 2015 according to IDC. Other players include Yuneec and Shenzhen Zero UAV Technology, commonly known as Xiro, as well as EHANG, which unveiled a drone this year that has the capacity to carry a human passenger over short-to-medium distances.

In its research, IDC pointed out the following five characteristics that will shape the camera drone market in China by 2019:

4K recording becomes important

"Only DJI and Yuneec have employed 4K cameras as a standard across their camera drones," IDC wrote, adding 4K technology will become mainstream for drones used for professional aerial photography.

4K is a new, high-definition resolution standard that produces better quality images and more detailed pictures.

But camera drones with lower-resolution cameras will still be favored by entry-level users or aerial photography amateurs.

Stiff price competition for entry-level drones

Price will become a factor as more drone makers will attempt to capture the entry-level camera drone market where drones are comparatively cheaper.

IDC said entry-level camera drone makers such as ZeroTech (Xiro), EHANG, and Parrot will come under pressure due to aggressive moves made by the likes of DJI, which introduced its Phantom 3 Standard drone, a ready-to-fly quadcopter with a built-in camera, into the market last year for 4,799 yuan ($738).

Other Chinese manufacturers such as WINGSLAND and SimToo also released camera drones priced below 5,000 yuan ($770), said IDC.

The Inspire 1 drone, which carries a 4K resolution camera.
ChinaFotoPress | Getty Images

Moving from specialized to general distribution channels

As the camera drone market grows in scale, IDC said the distribution channels for drones will shift from highly specialized distributors to more diversified ones including IT general distributors, e-commerce platforms, and physical retailers.

"The trend was kick started by DJI's appointment of VST ECS and Digital China as general distributors of its drone products in China," wrote IDC.

Explosive growth in commercial camera drones

Commercial camera drone shipment will reach 930,000 by 2019 according to IDC, accounting for approximately 30 percent of the mainland's overall camera drone market. The market is currently dominated by mostly consumer applications in media and entertainment - such as aerial photography.

This would be due to more widespread applications of camera drones in areas of mineral exploration, traffic law enforcement, disaster monitoring, and vocation education, said IDC.

The growth is set to take off by the end of 2016.

Drone company that checks on oil safety raises $5.7M

More competition from new entrants

As with most growing markets, the camera drone market in China will undergo significant restructuring , said IDC, as camera drone makers tie up with investors.

IDC also predicted internet companies will enter the camera drone market as part of their Internet of Things (IoT) deployments.

Traditional camera manufacturers including GoPro and Sony will also move to claim their stake in the consumer-grade camera drone market by relying on their existing user bases, camera technologies, and channel resources, said IDC.

— Follow CNBC International on Twitter and Facebook.