Successful with phones & drones, Parrot ponders farming
How did a car telephony specialist end up developing little pilotless spy planes? Furthermore, how has it turned drones into its fastest-growing business?
Business transformation stories are often told by executives as the outcome of their best-laid plans. The truth is usually closer to serendipity. Henri Seydoux, a 54-year old French entrepreneur, boldly admits this.
When asked why he did drones, Parrot’s founder and CEO told us in an interview here, "It’s because I’m crazy. Everyone at this company was against the idea."
Drone development at Parrot — an effort that began in stealth mode nine years ago — led to the January 2010 launch of Parrot AR.Drone, a radio-controlled flying quadcopter.
Parrot’s drone is designed to be controlled by a smartphone or a tablet running such operating systems as iOS or Android. Apps inside the device control the drone.
To everyone’s surprise, the company’s drone business has been picking up at a time when its automotive business— still its cash cow — has been dwindling.
Did Seydoux have a grand plan to shift Parrot’s emphasis? "No," he said with a little smile. "I just wanted to make toy drones."
In hindsight, his mischievous impulse has saved the company over the last few quarters.
Passion for "makers"
Perhaps the best way to describe Parrot is that it’s a 20-year-old startup (though already a public company in France) with a passion for "makers," an intimate knowledge of telephony connectivity, expertise in DSP software, and the capability to design ASICs in-house. Its engineers have designed their own chips, when needed. DiBcom, a French fabless chip company acquired in 2011 that specializes in mobile digital television and radio for the automotive industry, has also become a critical asset to Parrot.
Seydoux’s background is not in engineering but in journalism. This is evident in his ability to stay on message and disciplined in defining what Parrot is and what its products are supposed to do. Though its automotive products, drones, and connected objects seem unrelated, he insists that they share a common thread. "At Parrot, everything we do is connected. We develop unique, original products that are connected to mobile phones."
Parrot is one of the first CE vendors to define its company mission as developing products seamlessly connected with smartphones.
drone in his office.
That vision was articulated by Seydoux well before everyone in the industry started talking about the Internet of Things.
More importantly, Parrot designs its software/hardware architecture in such a way that its products can profit from the progress of smartphones. As smartphones’ processing power expands and apps proliferate, Parrot’s gadgets expand and proliferate. In other words, rather than allowing smartphones to make his products obsolete (which happened to many Japanese CE vendors), Seydoux presciently understood the importance of piggybacking his business on the progress of smartphones and tablets.
Parrot doesn’t do the usual connected/wearable devices, such as wristbands or smart glasses. Seydoux said he takes pride in developing original products. "That’s why we don’t do pWatch," or Parrot Watch.
In the following pages, we examine Parrot, an admittedly quirky French consumer electronics vendor, breaking down its businesses and how it plans to advance its interests as far afield as "agriculture."
Automotive in transition
Parrot’s first success came from its Bluetooth-connected car telephony (and later digital music) business.
Though the automotive segment generated 62% of the company’s overall revenue in the first nine months of the current fiscal year, this business is declining.
In part, Parrot’s product portfolio is in the midst of a transition — from hands-free car telephony/audio units to in-vehicle infotainment systems. The company says its infotainment system’s reference design is picking up contracts from car OEMs (nine brands worldwide). But in recent quarters, Parrot has been caught between carmakers’ design cycles.
The big news it will bring to the International Consumer Electronics Show is a new infotainment reference design that comes with a display. (Its previous design, Simple Box, had no displays.)
Parrot, which joined the Google-led Open Auto Alliance in June, will demonstrate its new infotainment system. The design — complete with Google Auto’s Projected Mode — can project on an in-car screen the content on an Android phone (connected via USB). More significantly, it actually "renders and resizes" applications, images, and video on the fly to fit on the display.
phone, but you can touch and control them on
the Simple Box’s display.
"No apps" reside in the in-vehicle infotainment system, Seydoux said. But the reference design is driven by Parrot’s own ASIC, Parrot 7, which is responsible for rendering images and video. The ASIC is packed with dual-core Cortex A9, Mali 400 GPU, 2 ISP + 6 video interfaces, 1 Gigabit per second Ethernet, and AVB and others.
Parrot is no novice player in the automotive market. It has built its business by developing a universal receiver that can link with any mobile phone — to enhance voice quality for hands-free car phones while improving audio acoustics.
Carmakers are getting lost
While developing its in-car telephony system, Parrot identified the plain truth that a conventional proprietary in-car system simply duplicates smartphone functions. Seydoux is applying the same principle to in-vehicle infotainment.
Between smartphones and all the fancy infotainment systems car OEMs are developing in high-end models, "there are so many areas of [technology] overlapping, even though what you want to do inside a car — whether GPS, mapping, calling, and any other apps — can be already done by smartphones," he said.
With Apple’s CarPlay and Google’s Projected Mode about to storm the automotive market, "I’m afraid that carmakers will find their roles [in the field] very limited."
Moreover, Seydoux argued, "in cars in the mass-market category, priced between $10,000 and $25,000, carmakers’ margins are so tight that there isn’t a lot of room left." Certainly, they can’t add the sort of large display that Tesla is using.
"At Parrot, we do the best in-car infotainment system using smartphones and tablets," he said. "If well implemented, carmakers can follow the progress of smartphones and tablets." Consumers will bring their own smartphones and tablets into their cars, costing carmakers nothing.
Seydoux is optimistic about getting Parrot’s reference designs into OEMs’ infotainment systems — especially for mass-market cars. "We’ve built our automotive business by selling products on the aftermarket." For Tier 1s and OEMs, Parrot can offer "a turnkey solution, already proven, debugged, and tested on the aftermarket."
From mini-drones to flying camera drones
According to Parrot, third-quarter drone revenue increased 130% from the same period last year. In fact, the drone segment provided 44% of the company’s overall revenue in the third quarter of 2014, bringing in €27.7 million ($34 million).
Though 87% of its drones are sold for consumers, revenue from commercial and civil drones are rising steadily.
Last month, Parrot launched its €499 Parrot Bebop Drone — which Seydoux calls a "flying GoPro" — in addition to mini drones (the €159 Jumping Sumo MiniDrone and the €99 Rolling Spider MiniDrone).
The Bebop Drone, which does not use a GoPro camera, leverages the Parrot engineering team’s unique software skills to capture well-stabilized HD video images.
Seydoux said two things are necessary in making something like the Bebop Drone. "First, the drone needs to fly well. Second, we have to make a very good camera." But making a drone that can fly in a stable manner isn’t easy. Maneuvering the propellers’ motor speed is the only means of keeping the drone flying smoothly.
"At Parrot, we like to think we are good at software," he said. But when it comes to mechanical designs, "not so much." The device uses a fish-eye lens to capture a 180-degree video image. Yannick Levy, the former DiBcom CEO who joined Parrot in 2011, said Parrot software running on a GPU flattens the image, selects and stitches the images to make the video footage look steady.
When flying outdoors in wind and in other conditions, Seydoux said, the Bebop Drone "shakes a lot." But the camera drone can produce steady video without adding extra parts or components to the drone or making it heavier. "We depend on our software" to compensate for any potential weaknesses.
Flying robots
Levy, now executive vice president for business development at Parrot, acknowledged that a lot of his time is spent developing Parrot’s drone business, especially in commercial and civil drones. "In many ways, drones are turning into flying robots," he said. Commercial drones are now being applied, not only for surveillance, but also for mapping and agriculture.
"Drones can carry a lot of payloads," such as image sensors, ultrasound, laser, and vision mapping. When sensor data is combined with the brain of a drone, it can, for example, calculate nitrogen levels in crops. It can visualize and map out the fields, determine soil and crop health, and prescribe the necessary level of fertilizer.
Parrot Flower Power, a wireless sensor for plants.
Beyond the company’s wireless, hands-free headphone, Zik2.0, and a wireless stereo audio system called Zikmu Solo, Parrot is pushing its Internet of Things devices, not in fitness or health, but in the agricultural field.
In an urban setting, it means potted plants and flowers on a terrace or balcony. This year, Parrot rolled out Flower Power, "the first intelligent wireless sensor" applied to gardens.
The battery-operated, Bluetooth-enabled wireless sensor unit is designed to connect to a Bluetooth LE-enabled iOS device. One can place it in the soil next to a plant and correlate it with the Parrot plant database. It monitors and collects data on soil moisture, sunlight, temperature, and fertilizer. It will diagnose any issues and help the user monitor the plant’s needs for long-term care.
Parrot plans to launch a couple of new products — suspected to be related to gardening — at CES. But the company isn’t giving out any more information until the announcement.
Spread too thin?
With close to 900 employees, half of them engaged in R&D, Parrot might be getting spread too thin. After all, drones, automotive infotainment systems, and wireless sensors for gardening are very different businesses.
But using connectivity as a common thread, Seydoux said he is aware that his devices are naturally taking Parrot into the business of collecting data.
If Flower Power becomes popular, the wireless sensor data collected every 15 minutes could eventually morph into more accurate weather data, he said.
But how is Parrot planning to respond to the inevitable privacy, security, and safety issues presented by drones and other connected devices?
"As a company, we follow the rules. But eventually, it is in the hands of the users of our devices, who are responsible for using them appropriately," he said. "We can’t put a policeman at each drone."
Do drones face a backlash for violating privacy? "No. Not really. I have yet to see naked celebrities shot by camera drones."
The irony of this statement, especially coming from Seydoux, is that his daughter, the actress Léa Seydoux, will be exposed quite publicly (and perhaps overflown by a few pararazzi-operated drones) in the next James Bond film.
— Junko Yoshida, Chief International Correspondent, EE Times
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