International shipping giant DHL is ceasing development of its Parcelcopter delivery drones, according to a Monday report in German publication WELT. That halts the company’s nearly decadelong quest to become a leader in the emerging drone industry.
”We are not continuing the Parcelcopter project,” Alexander Edenhofer, a DHL spokesman, told Benedikt Fuest of WELT. According to Fuest, the company (OCTUS: DPSGY) also said it will cease its pilot program with German manufacturer Wingcopter, through which it has been testing drone delivery of medical supplies in Tanzania.
Edenhofer’s declaration comes just days after DHL touted the Parcelcopter drone delivery tech on its website, declaring it to be “ready for the mainstream.”
It’s become clear that the drone delivery space can be very finicky. Just last week, Wired reported that Amazon (NASDAQ: AMZN), another of the behemoths trying to get in on drones, has all but dismantled its drone operations in the U.K. Interestingly, it appears to be the big fish that are floundering, opening the door for smaller drone companies.
Last month, Walmart (NYSE: WMT) announced its investment in DroneUp, a smaller drone flight services provider, to deliver commerce orders via delivery drone in Arkansas. The next step could be an outright acquisition of a drone maker by one of these companies.
Smaller deals have happened before, like Google’s (NASDAQ: GOOGL) buyout of Titan Aerospace, Intel’s (NASDAQ: INTC) acquisition of Ascending Technologies and Verizon’s (NYSE: VC) purchase of Skyward. But the market for drones has never been more ripe for the picking than it is now, with drone pilots popping up all over the country and the Federal Aviation Administration steadily increasing its drone regulations.
Drone delivery presents a global, interconnected and red-hot market for companies that are willing to take advantage. It seems unlikely DHL or Amazon is out of the game, despite having stopped their internal drone projects. The market may prove too mouth-watering, whether they end up producing their own drones or buy up someone else’s.