It took Insta360 nearly five years to bring panoramic cameras into the sky.
On July 28, 2025, the company officially announced its joint incubation of the drone brand Antigravity with a third party; on December 4 of the same year, the first product, the Antigravity A1 panoramic drone, was officially launched. It allows users to wear glasses and "sit inside" the aerial footage, marking Insta360's formal entry into the drone market.
Fifteen months later, capital market growth expectations have significantly cooled. As of October 30, 2026, Insta360's total market cap stood at approximately CNY 34.8 billion, having evaporated over CNY 100 billion from its peak. In its Q3 2026 report, Insta360 stated frankly that new categories such as drones are still in the market education phase, have not yet achieved scale effects, and have formed a negative impact on the company overall.
Insta360's CNY 100 billion drawdown includes a reassessment by the market of its multi-line expansion, profitability, and valuation, and cannot be entirely attributed to drones. However, how many new product lines can a single imaging technology support, and what is the cost in terms of profit and cash flow for each product line expansion, has become a core question that Insta360 cannot avoid.
Why Open Fire?
Insta360's entry into the drone market stems from real growth pressure. In the panoramic camera field, Insta360 already occupies more than half of the global market. In 2025, Insta360 achieved operating revenue of CNY 9.741 billion, a year-on-year increase of 74.76%. That year, Insta360's global shipment share of panoramic cameras exceeded 65%.
The IDC Global Panoramic Camera Market Report for Q2 2026 shows this figure rose further to 72.5%. However, global panoramic camera shipments in Q2 2026 grew by only 4% year-on-year. Insta360 has approached the monopoly ceiling in this niche segment and urgently needs to find new growth points.
Over the years, Insta360 has accumulated extensive experience in technologies such as panoramic stitching, invisible selfie sticks, and free framing. These technologies can extend to drones, allowing users to record the complete surrounding view during flight and then freely choose shooting angles through post-editing, lowering the operational threshold for aerial photography.
On July 28, 2025, the consumer-grade drone brand "Antigravity" and its logo were officially unveiled, entering the consumer drone market with a differentiated positioning as a "panoramic FPV drone." Three days later, DJI launched a counterattack. On July 31, 2025, DJI released its first panoramic camera, the Osmo 360, formally entering the panoramic camera market where Insta360 had long held an advantage. Less than two months later, DJI released the wearable camera Osmo Nano, extending the competition to Insta360's thumb camera segment.
This means Insta360 must not only seek new growth space but also invest more resources to defend its existing market. The competition between the two parties can hardly be limited to a single product line, evolving into cross-category offense and defense across all products.
Although Insta360 founder Liu Jingkang stated that the company decided to layout drones about five years ago and even anticipated that this move might prompt DJI to enter the panoramic camera market in return, cameras and drones are ultimately different products. Flight control, obstacle avoidance, video transmission, and after-sales repair require Insta360 to rebuild capabilities. To truly compete for market share against DJI, imaging technology alone is far from sufficient.
Being Slightly Better Is Not Enough
The differentiated experience of panoramic immersive flight is insufficient to drive mature drone users to switch brands. The Antigravity A1, with which Insta360 challenges DJI, is a consumer-grade drone featuring 8K panoramic shooting and immersive flight.
Users simply need to wear Vision flight goggles to observe aerial views in different directions by turning their heads; combined with the Grip motion controller, they can control flight direction through hand movements. Even when the drone is flying forward, users can turn around at any time to observe the scenery behind them, freeing flight direction and viewing angle from mutual constraints. With a body weight of approximately 249 grams under standard battery configuration, this solution indeed holds some appeal for scenarios like travel recording and outdoor shooting.
But the problem lies in the fact that product novelty does not mean consumers are willing to pay for it.
For users accustomed to traditional aerial photography, they care more about whether they can stably and conveniently capture the desired shots. While panoramic shooting increases creative freedom in post-production, its ultimate ability to attract consumers depends on image quality performance, editing efficiency, and daily usage habits.
Consumers' acceptance threshold for innovative products is much higher than general corporate expectations. Harvard Business School professor John Gourville proposed the famous "9X" theory: Companies tend to overestimate the value of new products by about 3 times due to the innovator's endowment effect; users tend to overestimate the value of existing products by about 3 times due to loss aversion and status quo bias. The combination creates a 9-fold cognitive gap — only when the comprehensive experience of a new product reaches 9 times or more that of the old product can it drive users to actively switch brands. This rule is particularly significant in the hardware consumption sector, where localized functional optimizations and upgrades struggle to break through user inertia.
For DJI's existing users, years of usage habits themselves constitute an advantage. From controllers and flight goggles to batteries, accessories, and repair services, users have formed a relatively mature usage system. Some devices can continue to be used between compatible models, further reducing upgrade costs.
If switching to Antigravity, consumers not only need to relearn operation methods but also consider whether existing accessories remain usable, and whether the new brand's flight reliability and after-sales service are trustworthy. These hidden costs directly affect final purchase decisions.
However, before Antigravity could fully open up the market, DJI quickly followed suit. On March 26, 2026, DJI officially released the Avata 360, similarly combining panoramic shooting, post-production free framing, and immersive flight, directly entering the panoramic drone niche segment and forming head-to-head competition with the Antigravity A1.
According to official pricing at launch, the Avata 360 Immersive Fly Kit, including the N3 Flight Goggles and Motion Controller, was priced at CNY 5,488. For users who already own some compatible devices, DJI offered the option to purchase the aircraft separately, further lowering the barrier to trying new products.
Insta360 responded with direct price cuts. On March 27, the price of the Antigravity panoramic drone standard kit dropped from CNY 6,799 to CNY 5,499, a reduction of CNY 1,300, but this did not reverse its passive position in the competition. Insta360's drone business volume is small, and supply chain costs are higher; following the price cut would directly erode product gross margins, further compressing the space for R&D, after-sales, and channel investment.
When differentiated selling points fail to form a generational-level experience advantage, challengers fall into a passive situation of being "neutralized by imitation." The panoramic innovation of the Antigravity A1 belongs to "incremental upgrades," rather than a "tenfold solution to core pain points." Once giants follow suit and replicate it, relying solely on functional differences makes it difficult to retain users. The outcome of this product-side offense and defense will ultimately translate directly into the company's profitability and valuation system.
Behind the Evaporation of CNY 100 Billion in Market Value
Insta360's high initial valuation upon listing was built on the growth expectation that "imaging technology can be reused across categories." Previously, investors' core pricing logic recognized Insta360's leading barriers in the panoramic camera field while believing it could rapidly replicate its imaging algorithms and product definition capabilities to new categories such as gimbal cameras and drones, opening up long-term growth ceilings. The dense introduction of new categories continuously amplified the market's imagination regarding the company's business landscape, supporting the valuation premium of high-growth stocks.
When the cost of expansion begins to reflect on the income statement, high growth expectations face the test of performance verification. In the first three quarters, Insta360 achieved operating revenue of CNY 9.436 billion, showing a clear year-on-year increase compared to CNY 6.611 billion in the same period last year. However, operating costs also rose from CNY 3.330 billion to CNY 5.830 billion, growing faster. The comprehensive gross margin fell from 49.61% in the same period last year to 38.21%, a year-on-year decline of approximately 11.4 percentage points.
Pressure on expenses is equally significant. In the first three quarters, Insta360's sales expenses increased from CNY 1.130 billion to CNY 1.617 billion, and R&D expenses increased from CNY 1.085 billion to CNY 1.601 billion, with both items increasing by a combined total of approximately CNY 1 billion. However, at a stage where revenue growth has not yet fully translated into profits, expense expansion directly squeezed the profit buffer and caused the market to question the input-output ratio of new businesses.
Insta360's 2026 semi-annual report disclosed that Shenzhen Antigravity Technology achieved operating revenue of approximately CNY 230 million and a net loss of approximately CNY 290 million in the first half of the year. For Insta360, which has just entered the drone market, product R&D, channel construction, and marketing promotion require time, so short-term pressure on profitability is not surprising. What truly warrants attention is when these investments will yield sustained sales growth and profitability improvement.
High inventory and strained cash flow further compressed the safety margin of valuation. As of the end of September 2026, the company's inventory scale reached CNY 7.154 billion, an increase of approximately 145% from CNY 2.919 billion at the beginning of the year; meanwhile, net cash flow from operating activities in the first three quarters was -CNY 4.264 billion.
For rapidly expanding consumer electronics companies, pre-purchasing chips and other raw materials and stocking up for new product launches are normal business practices. Xinliu believes that if terminal demand falls short of expectations or product iteration accelerates, companies will simultaneously face dual pressures of inventory devaluation and tight cash flow, which is also an important reason for the market to lower valuations.
Xinliu Viewpoint: An Attrition War Without a Definitive Winner Yet
For Insta360, the cost of attacking DJI has exceeded expectations. Significant market cap drawdown, near-zero profits, operating cash flow turning from positive to negative, and looming high inventory have dragged an originally healthy financial structure into a tense state due to multi-line expansion.
For DJI, this is likewise not a zero-cost defensive battle. To respond to Insta360's crossover, DJI had to enter imaging tracks such as panoramic cameras and thumb cameras, adding new R&D and channel investments, and passively getting involved in category competition where it lacks expertise.
Category expansion is not simple technology translation, and user mindshare cannot be shifted by a single differentiated product. The essence of cross-border warfare has never been a zero-sum game of "who replaces whom," but an inevitable trial for a niche leader breaking outward after main business growth peaks. As novelty fades and price wars deepen, the two sides will ultimately compete on sustainable profitability. Insta360 wants to steal market share from DJI, while DJI aims to defend its advantages. In the end, who retains more profit may matter more than who grabs more market share.