Produced by | Paicaijing Original (ID: paicj314)

The Luna series, X6, and other major new offerings have swept the market, with each launch achieving impressive initial sales in recent years. Yet, despite these eye-catching sales figures, the profits reflected in financial reports remain stubbornly low, posing one of Insta360’s most significant challenges today.

Although Liu Jingkang, the company's leader, is willing to sacrifice short-term profits for long-term growth, questions persist externally about when this STAR Market-listed hardware company—which holds a 70% global market share in panoramic cameras—will strike the right balance between product innovation, technology, and profitability.

How long will the trend of 'high product recognition but poor profitability' continue?

Hot New Products, Cold Profits

A look at Insta360’s financial report for the first half of 2026 reveals a sharp contrast. The company achieved revenue of RMB 5.517 billion, a 50.29% year-on-year increase, with cumulative global shipments of smart imaging devices nearing the ten-million mark and continuing to grow.

However, net profit attributable to shareholders stood at just RMB 30.4 million, a steep 94.15% drop year-on-year. Non-recurring net profit turned negative, with a deficit of RMB 15.3392 million. In the second quarter alone, the net loss attributable to shareholders reached RMB 54.2129 million, marking one of the most challenging quarters for operational pressure since the company went public. In reality, profit pressure stems from rising raw material costs, such as memory chips, combined with phased R&D and supply chain investments for new product categories, as well as intensifying market competition.

This explanation seems plausible. In June of this year, Insta360 officially released the gimbal camera Luna Ultra, which quickly sold out on major domestic e-commerce platforms shortly after launch and ranked highly on overseas multi-platform lists. Subsequently, the Luna Pro was launched in August, entering the highly competitive gimbal camera market.

However, Luna Ultra had only a brief sales cycle in the first half of the year, with most of its sales expected in the second half. The X6, released in August, fell entirely outside the half-year reporting period. While sales contributions may be more significant in the second half, R&D investments had to be made upfront.

Over the longer term, each new product from Insta360 requires substantial investment to drive sales. In 2025, the company invested RMB 1.53 billion in R&D, nearly doubling year-on-year. In the first half of 2026, it maintained high-intensity investment, with R&D spending accounting for 18.78% of revenue, reaching RMB 1.007 billion, a 79.26% year-on-year increase.

Meanwhile, selling expenses were RMB 1.017 billion in the first half, a 61.96% year-on-year rise, with the selling expense ratio climbing to 18.46%. Together, these two expenses totaled RMB 2.024 billion, accounting for 36.7% of revenue. Combined with large-scale inventory buildup, overall operating costs surged.

The excitement around new product launches is undeniable, but the realities of the hardware industry remain unchanged. A new hardware category demands heavy upfront R&D investment in sensors, algorithms, and structural components, as well as large-scale advance purchases of raw materials. Financial data shows that Insta360’s inventory reached RMB 6.21 billion in the first half, a 112.82% increase from the start of the year.

However, expanding into new markets does not immediately yield positive returns. The gimbal camera market is a fiercely competitive red ocean, where new entrants must face off against established players. New products often need to cede some profit margin to gain market share, and when combined with upstream component price hikes, overall gross margins are squeezed. In the first half of 2026, the company’s overall gross margin was 41.4%, down 9.8 percentage points year-on-year, with a further decline in the second quarter.

Ranking highly in product sales is just the first step in commercialization. Digging deeper into the mismatch between costs and revenues, the panoramic camera market, which Insta360 built its foundation on, also has inherent limitations.

Pushing Technical Boundaries with New Products

Panoramic Cameras Remain a Niche Market

Represented by the X6, Insta360 has pushed the technical capabilities of panoramic cameras to new heights, attempting to broaden usage scenarios through functional integration. However, the market itself is limited, and even with cutting-edge technology, it is difficult to break free from the inherent size constraints of the category.

Specifically, the X6, released in August, represents a bold experiment in panoramic device form factors. This flagship panoramic camera integrates the capabilities of panoramic, action, and gimbal cameras into a single body. The logic is sound: by combining functions, it reduces the cost of device procurement for users and attracts more ordinary consumers.

Coincidentally, another testament to Insta360’s product and technological imagination is the proposal of the Cameraman photography robot concept. However, product innovation must be evaluated within the context of the real industry landscape.

According to IDC’s Q1 report, global shipments of handheld smart cameras reached 4.14 million units, of which panoramic cameras accounted for just over 500,000 units, or about 12%. While growth exceeded 55%, the absolute volume remains a niche segment.

This summer, LuoTu Technology’s summer travel season data showed that in the online market for handheld imaging devices during the 2026 summer season, panoramic cameras accounted for 3%, while gimbal and action cameras dominated the market. Although the X6 integrates functions from several other categories, it still falls under the panoramic category.

Insta360 already commands a very high market share in the panoramic camera space, with a 68% global sales market share in Q1 2026, essentially capturing the majority of this niche market.

The market is still growing, but the base remains small.

Insta360 has refined panoramic technology to a high standard, but whether this niche market can generate expected profits remains to be seen. When growth in the original market is limited, expanding outward becomes inevitable, but such expansion comes at a cost.

No Absolute Barriers in Consumer Electronics

But the New Cycle Has Not Fully Arrived

In Liu Jingkang’s view, most consumer electronics lack absolute barriers, but this does not mean that existing market players’ positions can be easily overturned through effort. Stories and products must ultimately be validated by scale leadership and profitability.

Today, Insta360 has built a complete product matrix covering panoramic, action, gimbal, audio hardware, drones, and more, with multiple consumer imaging product lines under X, GO, Ace, and Luna. As Insta360 continues to enter competitors’ core markets, the competition has become a marathon. However, at this stage, new products are adding to cost burdens, and the cycle for profit recovery will take time.

Looking back at Insta360’s product strategy, the intensive new releases (frequent new product launches) are a response to growth, profit, and competitive pressures. Internally, the panoramic market faces volume constraints, while externally, industry competition is intensifying. Staying put in the old market means losing share, but expanding outward requires bearing multiple costs for R&D, supply chain, and marketing. If new businesses struggle to contribute significant profits in the short term, they may continue to drain company resources.

Thus, while new products frequently top sales charts, corresponding profit growth has not materialized. Although some new products carry more strategic significance than short-term profitability, prioritizing market share and user acquisition over immediate profits, strong sales and shipment volumes prove market recognition of product strength—but shipments do not equal profitability.

Gradually, a common industry scenario emerges: companies hold a portfolio of acclaimed products but wait endlessly for the harvest period. Insta360’s future growth relies on multi-category expansion, but when will commercialization materialize? Moreover, as Insta360 ventures into markets dominated by others for years, it faces competition not only from traditional rivals but also from smartphone makers like OPPO, vivo, Honor, and Xiaomi eyeing the handheld imaging market—a 'double-edged' challenge.

Frankly, Insta360 has delivered impressive technical achievements, but technical superiority does not equate to business success. Replicating success in a niche market across more categories is far more complex than refining a single hardware product.

Therefore, Insta360’s core challenge ahead is not just expanding revenue scale but converting high R&D investment, new categories, and globalization efforts into stable profitability more quickly.

As for whether future products like Luna, X6, and beyond can translate buzz into tangible profits and escape the trap of revenue growth without profit growth, Insta360 needs to prove itself soon.