Produced by | RoboIsland

During last year’s National Day holiday, Liu Jingkang happened upon a street performance at an unfamiliar corner. Holding Insta360’s unreleased Luna prototype, he aimed to capture the moment. However, he soon encountered a dilemma: glued to the small screen, he feared missing the perfect shot and thus couldn’t fully enjoy the performance. What should have been a joyous experience turned into a tense recording session. Upon reviewing the footage later, he found the images stable, yet his memory of that evening remained hazy.

“I recorded out of fear of missing out, but the only time I could truly enjoy it, my eyes were fixed on the screen,” he reflected.

Upon returning to the company, Liu Jingkang made a decision that frustrated the Luna team: he insisted on the immediate development of a first-person head-tracking module, enabling the camera to follow the user’s gaze—filming wherever they looked. This addition delayed Luna’s launch from May to June. Liu Jingkang publicly apologized on social media, stating, “I’m sorry for the delay in Luna’s launch to June due to my last-minute requirement.”

Liu Jingkang’s concern over the product launch timing stemmed from Luna’s significance for Insta360. It represented the company’s “second growth curve.”

Previously, Insta360’s revenue heavily depended on panoramic cameras, capturing a 91.3% share of the global market in the first half of 2025. However, the entire global panoramic camera market is valued at just over 5 billion RMB. In contrast, Luna is venturing into the gimbal camera market, projected to grow by over 100% globally in 2025. DJI’s Pocket 3 alone has sold over 10 million units, generating nearly 20 billion RMB in revenue.

The challenge? DJI dominates this market.

In 2025, DJI’s revenue surpassed 85 billion RMB, with net profits exceeding 20 billion RMB—more than 20 times Insta360’s profit and nearly nine times its revenue.

DJI, with no immediate need to go public and ample cash reserves, can outlast any competitor. In contrast, while Insta360’s revenue approached 10 billion RMB in 2025, its net profit began to decline; by the first quarter of 2026, its net profit margin had plummeted to single digits.

This means Insta360 has chosen a path where victory through attrition seems unlikely: as a company with revenue in the tens of billions of RMB, it is entering the core territory of a trillion-RMB giant, competing on price, supply chain, channels, and patents—areas where DJI excels.

This won’t be a fair fight.

1. Panoramic Cameras Can’t Contain Insta360's Ambitions

Insta360 didn’t choose to challenge DJI out of desperation. On the contrary, the company found itself at a critical juncture.

In June 2025, Insta360 went public on the STAR Market, surging 285% on its debut, with its market cap once exceeding 70 billion RMB. Liu Jingkang became the youngest chairman on the STAR Market. Investors flocked, and the media hailed it as a new beacon of “Made in China” innovation.

But Insta360’s core business—panoramic cameras—operates in a niche market.

The global panoramic camera market was just 5.03 billion RMB in 2023 and is expected to reach only 7.85 billion RMB by 2027. Insta360 already dominates this market, with a market share once exceeding 85%.

When a company holds over 85% of a market, growth becomes severely limited.

Post-IPO, capital markets demand continuous revenue and profit expansion. Insta360 must find a larger market. The consumer drone market, dozens of times larger than panoramic cameras, seemed ideal.

The problem? Over 70% of this market is controlled by DJI, located just 10 kilometers away.

Liu Jingkang made his choice.

In July 2025, Insta360 boldly announced its entry into the drone market, launching the panoramic drone brand Antigravity. The news sent the market into a frenzy, with Insta360’s stock surging for days and its market cap once hitting 150 billion RMB.

But in the Sky City building, just 10 kilometers away, someone felt more than a stir. DJI’s founder, Frank Wang, later remarked in an interview that Insta360’s boss reminded him of Red Boy—a fearless demon in Journey to the West who was eventually tamed by Guanyin and became her disciple.

DJI’s counterattack came swiftly.

Three days after Insta360’s drone announcement, DJI teased its first panoramic camera, the Osmo 360, priced at 2,999 RMB—nearly 800 RMB cheaper than Insta360’s flagship X5. Later, DJI launched the thumb-sized Osmo Nano to compete with Insta360’s GO Ultra series, priced about 900 RMB lower after subsidies. Then, DJI released the panoramic drone Avata 360, priced at 2,788 RMB, making Insta360’s Antigravity A1, priced at 6,799 RMB, seem uncompetitive.

Insta360 lit a fuse, and DJI used its entire product line to extinguish it. The cost of this operation is now evident in Insta360’s financial reports.

2. Growth at the Cost of Bleeding

In April, Insta360 released its first annual and quarterly reports since going public.

In 2025, Insta360’s revenue reached 9.741 billion RMB, up 74.76% year-on-year, nearing the 10 billion RMB mark. This figure looks impressive, especially in a sluggish consumer electronics industry where near-doubling growth is rare.

But net profit numbers silenced the market. Net profit attributable to shareholders was 929 million RMB, down 6.62% year-on-year—Insta360’s first-ever decline in net profit since disclosing financial data.

If 2025 could be described as “revenue growth without profit growth,” Q1 2026 was “revenue growth with bleeding.” Revenue hit 2.481 billion RMB, up 83.11% year-on-year. But net profit attributable to shareholders was just 84.62 million RMB, down 52.02% year-on-year. Non-GAAP net profit was 62.25 million RMB, falling even further, by 61.27%.

The net profit margin collapsed from over 20% two years ago to single digits, shrinking by more than 20 percentage points.

Even more concerning was cash flow. In Q1, net cash outflow from operating activities was 1.471 billion RMB, compared to 381 million RMB in the same period last year. The company was burning cash nearly four times faster than a year ago.

Where did the money go?

R&D: In Q1 2026, R&D spending reached 465 million RMB, up 100.59% year-on-year. R&D expense ratio rose to 18.73%, with quarterly R&D spending exceeding net profit by more than five times.

Sales: In 2025, sales expenses hit 1.679 billion RMB, up 103.31% year-on-year. Offline stores expanded from 36 to nearly 300, an eightfold increase in three years. Each new store, from rent to renovation to staff salaries, is a significant drain on resources.

Liu Jingkang explained in a shareholder letter that these were strategic investments, trading short-term profits for long-term capabilities. The company was simultaneously advancing two drones, gimbal cameras, wireless lavalier microphones (three new categories), and three custom chips. In 2025, strategic project investments totaled 762 million RMB, about 80% of net profit; in Q1 2026, this ratio soared to 300%.

The logic sounds self-consistent: invest first, reap rewards later. But how long will the market wait?

Capital markets never believe in future stories—only current numbers. The stock price fell from 377 RMB to 150 RMB, a clear signal from the market.

3. Asymmetric Warfare

This is an all-out suppression on product, price, supply chain, channels, and patents. By current standards, Insta360 is at a disadvantage in every dimension.

In 2025, DJI’s revenue exceeded 85 billion RMB, with net profits surpassing 20 billion RMB and a net profit margin exceeding 20%. Among all unlisted private companies in China, DJI ranks in the top five for profit, with hundreds of billions in cash on hand and consistently positive operating cash flow.

Not going public means DJI doesn’t need to explain “why profits declined this quarter” to capital markets every three months. It can wage price wars until competitors can’t hold on. It can tolerate unprofitable product categories to block competitors’ expansion.

This is exactly what hurts Insta360 the most.

During the 2026 618 shopping festival, DJI slashed prices on over a dozen products, with reductions of up to 2,500 RMB. Insta360 had to follow suit, cutting its flagship X5 by 1,370 RMB.

Why could DJI afford to cut prices? Pocket 3 alone has sold over 10 million units, generating nearly 20 billion RMB in annual revenue. At this scale, R&D and supply chain costs per unit are fully amortized.

Insta360’s Luna Ultra is a first-generation product with no scale effect. If you cut 200 RMB, I can cut 200 RMB too—but DJI still makes a profit after the cut, while Insta360 might approach cost.

The supply chain is the second battlefield.

On December 8, 2025, Liu Jingkang sent an internal letter revealing a shocking figure: in the six months before Antigravity’s launch, 33 core suppliers faced exclusivity pressure. This included 7 optical lens module suppliers, 8 structural component suppliers, 3 screen suppliers, 2 battery suppliers, 8 chip and electronic component suppliers, and 5 others. Some suppliers directly stated, “We can have dinner together, but we can’t do business.”

Insta360 had to urgently switch to backup suppliers and massively overhaul its supply chain. This not only raised procurement costs but also increased uncertainty in product quality and delivery.

DJI has over 700 authorized retail stores in China, with a presence in third- and fourth-tier cities completed years ago. Insta360’s offline stores expanded from 36 to nearly 300 at an astonishing pace, but each new store consumes massive funds.

In November 2025, a Hunan-based Insta360 dealer watched as the sign for his 1 million RMB-renovated flagship store was taken down. The mall’s supplementary agreement explicitly prohibited brands in “strong competition” with DJI, with Insta360 explicitly defined as such.

The dealer was confused: “Before this, I sold both Canon and Sony. I’ve never heard of not being able to sell Sony because you sell Canon.”

Patents are the sharpest blade. RoboIsland previously analyzed this in detail in DJI Sues Insta360: Who Fired First, Who Loses?

The latest lawsuit occurred in June. DJI filed two complaints in the U.S. District Court for the Eastern District of Texas, accusing Luna of infringing on 2 design patents and 4 invention patents. Insta360 quickly counter-sued, filing 5 patent infringement claims against DJI in the U.S. on June 12.

U.S. patent litigation typically lasts 2 years and costs tens of millions of dollars. For Insta360, which reported just 84.62 million RMB in net profit in Q1, every litigation expense erodes its already thin profits.

4. Conclusion

On the evening of June 10, 2026, at 19:30, Insta360’s Luna Ultra was officially launched.

At the event, brand ambassador Li Xian wore the first-person head-tracking module, demonstrating the “look-and-film” feature. That feature, added on the spot due to Liu Jingkang’s regret during a street performance, became the most memorable moment of the launch.

On its first day, Luna Ultra ranked first in global sales across Douyin, JD.com, Tmall, Amazon, and other platforms. It sold out in 5 minutes, with lines forming at offline stores.

But first-day sales heat doesn’t equal sustained profitability. After production ramps up and Luna’s supply stabilizes, whether the 3,999 RMB price can hold remains uncertain.

Insta360 certainly has a chance to win. Its odds depend on several prerequisites:

Luna achieves stable, large-scale shipments in 2026, proving gimbal cameras are a true second growth curve; the patent litigation with DJI ends in a cross-licensing settlement rather than a permanent U.S. market ban; after smartphone makers enter, the gimbal camera market maintains current growth and profit margins instead of rapidly commoditizing.

If any of these prerequisites falter, Insta360 risks falling into a “growth stall + profit collapse” double dilemma.

The cost of this war is landing on its financial reports daily, with every expenditure. The war’s outcome won’t depend on whose product is better—but on who has more money and can outlast the other. After all, consumers always prefer affordable, high-quality products.

Cover source: The Devil Wears Prada

Featured image source: Insta360 official Weibo account 

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