Insta360 spent nearly five years preparing to send panoramic cameras into the sky.

On July 28, 2025, the company officially announced a joint effort with a third party to incubate the drone brand Antigravity. On December 4 of the same year, its first product—the Antigravity A1 panoramic drone—was officially released. It lets users put on glasses and "sit inside" the aerial footage, marking Insta360's official entry into the drone market.

Fifteen months later, the capital market's growth expectations have cooled significantly. As of October 30, 2026, Insta360's total market value stood at approximately 34.8 billion yuan, with more than 100 billion yuan wiped off from its peak. In its 2026 third-quarter report, Insta360 stated outright that new categories such as drones are still in the market education phase and have yet to achieve scale effects, weighing on the company's overall performance.

Insta360's hundred-billion retreat reflects the market's reassessment of its multi-line expansion, profitability and valuation, and cannot be entirely attributed to drones. But how many new categories a single imaging technology stack can support—and how much profitability and cash flow each additional product line costs—has already become a core question Insta360 cannot avoid.

Why Open Fire?

Insta360's entry into the drone market is driven by real growth pressure. In the panoramic camera field, Insta360 already holds the lion's share of the global market. In 2025, Insta360 achieved operating revenue of 9.741 billion yuan, a year-on-year increase of 74.76%, and its global shipment share of panoramic cameras exceeded 65% that year.

IDC's Q2 2026 global panoramic camera market report shows that this figure further rose to 72.5%, but global panoramic camera shipments in Q2 2026 grew only 4% year on year. Insta360 has approached the monopoly ceiling in its niche track and urgently needs to find new growth drivers.

Over the years, Insta360 has accumulated rich experience in technologies such as panoramic stitching, invisible selfie sticks and free framing. These technologies can be extended to drones, allowing users to record the complete scene around them during flight and then freely choose shooting angles through post-editing, lowering the operating threshold for aerial photography.

On July 28, 2025, the consumer drone brand "Antigravity" and its brand logo were officially unveiled, entering the consumer drone market with the differentiated positioning of a "panoramic FPV drone." Three days later, DJI launched a counterattack. On July 31, 2025, DJI launched its first panoramic camera, the Osmo 360, formally entering the panoramic camera market that Insta360 had long dominated. Less than two months later, DJI released the wearable camera Osmo Nano, extending competition into Insta360's thumb camera territory.

This means Insta360 not only has to find new growth space but also invest more resources to defend its original market. Competition between the two sides can hardly be confined to a single product line and has evolved into cross-category offense and defense.

Although Insta360 founder Liu Jingkang said the company decided to enter drones about five years ago and even anticipated at the time that this move might prompt DJI to enter the panoramic camera market in return, cameras and drones are, after all, two different products. Flight control, obstacle avoidance, image transmission and after-sales repair all require Insta360 to rebuild capabilities. To truly win market share from DJI, imaging technology alone is far from enough.

Being a Bit Better Is Not Enough

The differentiated experience of panoramic immersive flight is not enough to drive brand switching among mature drone users. The Antigravity A1, with which Insta360 challenges DJI, is a consumer drone focused on 8K panoramic shooting and immersive flight.

Users only need to wear the Vision flight glasses to observe aerial images in different directions by turning their heads; with the Grip motion controller, they can also control flight direction through hand movements. Even when the drone is flying forward, users can turn back at any time to observe the scenery behind them, and flight direction and viewing angle are no longer limited by each other. Combined with a body weight of about 249 grams under the standard battery configuration, this solution is indeed somewhat attractive for scenarios such as travel recording and outdoor shooting.

Image source: Antigravity official website

But the problem is that a product being novel does not mean consumers are willing to pay for it.

For users already accustomed to traditional aerial photography, what they care about more is whether they can stably and conveniently capture the images they want. Although panoramic shooting increases the freedom of post-production creation, whether it can ultimately attract consumers still depends on image quality performance, footage efficiency and daily usage habits.

Consumers' acceptance threshold for innovative products is far higher than companies generally expect. Harvard Business School professor John Gourville once proposed the famous "9X" theory: companies, due to the innovator's endowment effect, overestimate the value of new products by about 3 times; users, due to loss aversion and status quo bias, overestimate the value of existing products by about 3 times. The two combine to form a 9-fold cognitive gap—only when the comprehensive experience of a new product reaches more than 9 times that of the old product can users be driven to actively complete brand switching. This rule is especially pronounced in hardware consumption, where optimization and upgrading of partial functions can hardly break through users' usage inertia.

For DJI's longtime users, years of usage habits are themselves an advantage. From controllers, flight glasses to batteries, accessories and repair services, users have already formed a relatively mature usage system. Some devices can also continue to be used across compatible models, further reducing upgrade costs.

If they switch to Antigravity, consumers not only need to relearn operating methods but also consider whether their original accessories can continue to be used, and whether the new brand's flight reliability and after-sales repair are trustworthy. These hidden costs will directly affect final purchase decisions.

Image source: Antigravity official website

However, before Antigravity had time to fully open up the market, DJI quickly followed suit. On March 26, 2026, DJI officially released the Avata 360, also combining panoramic shooting, free post-production framing and immersive flight, directly entering the panoramic drone niche and forming direct competition with the Antigravity A1.

According to the official pricing at launch, the Avata 360 motion-sensing flight combo including the N3 flight glasses and FPV remote controller was priced at 5,488 yuan. For users who already own some compatible devices, DJI also offers the option of purchasing the aircraft separately, further lowering the threshold for trying new products.

Insta360's response was to cut prices directly. On March 27, the price of the Antigravity panoramic drone standard combo was reduced from 6,799 yuan to 5,499 yuan, a drop of 1,300 yuan, but it did not reverse its passive position in the competition. Insta360's drone business is small in scale and has higher supply chain costs, so following with price cuts directly erodes product gross margin and further compresses room for R&D, after-sales and channel investment.

When differentiated selling points cannot form a generational experience advantage, challengers fall into the passive situation of "being erased upon follow-up." The panoramic innovation of the Antigravity A1 is a "bonus upgrade" rather than a "tenfold solution to core pain points." Once a giant follows and replicates it, functional differences alone can hardly retain users. The outcome of this product-side offense and defense will ultimately be transmitted directly to the company's profitability and valuation system.

Behind the Evaporation of 100 Billion in Market Value

Insta360's high valuation in the early stage of listing was built on the growth expectation that "imaging technology can be reused across categories." Previously, investors' core pricing logic was to recognize Insta360's leading barrier in the panoramic camera field while believing it could quickly replicate imaging algorithms and product definition capabilities into new categories such as gimbal cameras and drones, opening up the long-term growth ceiling. The intensive launch of new categories once continuously amplified the market's imagination of the company's business map and supported the valuation premium of a high-growth stock.

When the cost of expansion begins to show on the income statement, high growth expectations face the test of performance verification. In the first three quarters, Insta360 achieved operating revenue of 9.436 billion yuan, a clear year-on-year increase from 6.611 billion yuan in the same period last year. But operating costs in the same period also rose from 3.330 billion yuan to 5.830 billion yuan, growing faster, and the comprehensive gross margin fell from 49.61% in the same period last year to 38.21%, down about 11.4 percentage points year on year.

Pressure on the expense side is also considerable. In the first three quarters, Insta360's selling expenses increased from 1.130 billion yuan to 1.617 billion yuan, and R&D expenses increased from 1.085 billion yuan to 1.601 billion yuan, with the two combined increasing by about 1 billion yuan. But at a stage when revenue growth has not yet been fully converted into profit, expense expansion directly squeezed the profit buffer and also raised market doubts about the input-output ratio of new businesses.

Image source: Company's 2026 third-quarter report

Insta360's 2026 interim report disclosed that Shenzhen Antigravity Technology achieved operating revenue of approximately 230 million yuan in the first half of the year and a net loss of approximately 290 million yuan. For Insta360, which has just entered the drone market, product R&D, channel building and market promotion all take time, so short-term profitability pressure is not surprising. What really deserves attention is when these investments can translate into sustained sales growth and profitability improvement.

High inventory and cash flow pressure further compressed the margin of safety in valuation. As of the end of September 2026, the company's inventory scale reached 7.154 billion yuan, an increase of about 145% from 2.919 billion yuan at the beginning of the year; in the same period, net cash flow from operating activities in the first three quarters was -4.264 billion yuan.

For a rapidly expanding consumer electronics company, purchasing chips and other raw materials in advance and stocking up for new product launches are normal business behaviors. Xinliu believes that if end demand falls short of expectations or product iteration accelerates, companies will face the dual pressure of inventory depreciation and tight cash flow, which is also an important reason for the market's valuation downgrade.

Xinliu Viewpoint: A War of Attrition with No Clear Winner Yet

For Insta360, the cost of attacking DJI far exceeded expectations. A sharp market value retreat, profits almost wiped out, operating cash flow turning from positive to negative, and high inventory hanging overhead—an originally healthy financial structure has been dragged into a tense state by multi-line expansion.

For DJI, this is likewise not a zero-cost defensive war. To respond to Insta360's crossover, DJI has had to enter imaging tracks such as panoramic cameras and thumb cameras, adding R&D and channel investment and being passively drawn into category competition it is not particularly good at.

Category expansion is not simply technology transfer, and user mindshare cannot be moved by a single differentiated product. The essence of crossover warfare has never been a zero-sum game of "who replaces whom," but an inevitable trial for a niche leader breaking outward after growth in its main business peaks. As novelty gradually fades and the price war deepens, what the two sides ultimately compete on will be the ability to sustain profitability. Insta360 wants to seize market share from DJI, while DJI wants to defend its advantages. In the end, who can retain more profit may be more important than who captures more share.

*Header image generated by AI

- XINLIU -