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Dynon Acquires Advanced Flight Systems

D

DFlyer

Well Known Member
Robert Hickman and I are pleased to announce that Dynon has acquired AFS. You can read the details in our Press Release.

The quick synopsis is; Dynon is buying AFS to keep AFS a strong and growing brand in the experimental market. Both companies will stay separate, each with their own development staff, sales, marketing, and tech support. Dynon will be using its manufacturing capabilities and supply chain strengths to help reduce AFS costs. AFS is remaining in Oregon, and there is no consolidation of location or staff.

I am sure that there will have many questions which Rob and I will try and answer. The most obvious ones are answered below.

-Robert
--
President, Dynon Avionics

Q: Why is Dynon acquiring AFS?
A: To use Dynon?s financial strength to keep AFS strong and vibrant in the experimental community.

Q: Are AFS and Dynon merging?
A: No. Both AFS and Dynon will continue to operate as separate companies.

Q: Will AFS be moving or consolidating with Dynon?
A: No. There are no changes in location in either company. AFS is located in Canby, Oregon, and Dynon is located in Woodinville, Washington.

Q: Will AFS be winding down their company over time?
A: No. In fact, this acquisition is explicitly designed to keep AFS products thriving in the market.

Q: Will Dynon technical support be supporting AFS products, or vice versa?
A: No. Each company continues with their own tech support staff. Dynon staff will not provide technical support on AFS products, and vice-versa.

Q: Are there going to be changes in personnel, especially at AFS? Is Rob leaving?
A: No. There are no changes in personnel. Rob will continue to run AFS and will be busier than ever.

Q: Will Dynon Sales and Marketing be promoting AFS products, or vice versa?
A: No. Each company will continue their own sales and marketing programs.

Q: Will Dynon manufacture AFS products?
A: Dynon intends to help manufacture some of the AFS products, although the details of which products and when are not yet decided. Regardless, AFS products will still be theirs, and their delivery, support, and warranty policies will continue as before.

Q: Will AFS and Dynon products be combined?
A: No. AFS will continue their product line and Dynon will continue theirs for the foreseeable future. The two companies will be sharing their respective technology expertise, so that both product lines continue to improve. AFS will continue to source some product modules from Dynon, like the transponder, with more to follow.

Q: What about the previously-announced collaboration between AFS and TruTrak?
A: AFS will continue to support TruTrak autopilots. However, a joint ATS venture will not be moving forward.

Q: Which product should I buy, AFS or Dynon?
A: What is important is you still have a choice of the two best product lines on the market, from companies that are truly dedicated to the experimental market.
 
It begins

I suspect the ramifications of the Big G aggressively entering the experimental market are only beginning to be seen.....
 
Sam Buchanan said:
I suspect the ramifications of the Big G aggressively entering the experimental market are only beginning to be seen.....
Click to expand...

You're likely correct and I can't argue much a case against you but I sure hope you're wrong.
 
Hopefully this acquisition won't distract Dynon from getting their COM Radio deliveries out soon! :cool:
 
I am in the process of having a AFS system put into my airplane. I don't really view this as good news. Almost without exception in these kinds of buyouts everything is promised upfront but then things change and the acquired company is slowly phased out or merged with the parent company. The business model of competing with your self never seems to work. I really hope I am wrong but in 5 years I will be very pleasantly surprised if AFS still exists in a form close to what it is today.

George
 
It is great to be working with Dynon. AFS will continue to operate just as it always has, but this arrangement frees us up to do even more design and development work. Dynon has strong manufacturing capabilities which will help us with the high demand we?ve been experiencing for the AF-5000 series of EFIS?s. We hope to be shipping units ?from stock? in the near future.

While AFS has had to compete against their low prices for years, I appreciate what they've done for the experimental market to make glass panels available for everyone. Without them, systems would still be $20,000 to $30,000. No-one else has the structure to innovate while maintaining low prices for the long haul. The entire staff at AFS is very excited.


Rob Hickman
Advanced Flight Systems Inc.
 
Neat!

Congrats to the AFS and Dynon team. Both of these teams are led by high-integrity owners who love what they do and are committed to bringing REALLY good products to us. No one knows what the future holds (or we wouldn't have to work) but seeing 2 teams such as these come together surely has the potential to only get stronger. Hopefully, it will be the proverbial 1+1=3.

Vic
 
It's impossible to tell what the true size of the market is and its growth rate. Last I counted there seemed to be a lot of players for what is a niche market in a niche market. I remember when the last company left the market in a conversation the owner relayed to me the small market size as a prime motivation for pulling out.

Maintaing two competing product lines won't make much sense for long. I'd say the biggest loser in all this is TruTrak although they have a strong enough product to survive but just lost a partner that offered hope for greater growth.

I'm glad that the owners of both companies found a path that made sense to keep tow companies viable. If I had to guess (and guess is all I can do) maybe one product line moves toward a higher end and the other the lower end - whatever that means. Or AFS becomes just part of the development team. There is a loyal customer base that needs to be taken care of as to not hurt Dynon's reputation in a market where reputation is big.

Of course the Garmin influence had to be huge. There resources have got to scare any competitor they have. The fact Garmin entered the market in the first place says that growth in low-end GA is all experimental/LS these days.

With the new law passing the House (and hopefully the Senate) maybe certification will become a reality. I sure would love to not have to buy a Garmin 430 just so I can fly IFR....
 
Both Dynon and AFS have been committed to the Experimental Aircraft market for more than 13 years. We have been friendly competitors who have always had mutual respect for each other and a common desire to bring the best to Homebuilders. With the combined engineering, manufacturing and product support resources of both companies our customers will be the clear winners.

The close proximity of Dynon in Seattle and AFS, near Van?s Aircraft, in Portland makes working together extremely convenient. As we have proven multiple times in the last month, Dynon and AFS are less than hour apart in the RV-10.

Rob Hickman
Advanced Flight Systems Inc.
 
I have experience in mergers and acquisitions of several technology companies. In my experience, the best way to maximize the potential is to have a personnel exchange program.

Send some engineers from Dynon to AFS and vice versa for at least a few months. When they return, they become champions of the opposite divisions, and will have made friends and important relationships that will help the integration.

If possible, permanent swaps can help as well. This advice is free :)

If I was GRT, MGL, TT or VP I would be afraid, very afraid...
 
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No losers

While this is a little different than our original vision, the truth is that it makes a lot of sense. All three companies are very positive about this move. It will give the customers better products and support.

TruTrak will continue to be a dealer for the AFS product line, and will continue working very closely with Rob and his team. The AF Pilot will continue being sold as part of the AFS product line.

Many people do not realize how closely these three companies have been working. Each company is active in the ASTM light sport, and avionics standards. We have also been active participants in the part 23 rewrites and various other projects.

I can assure you that we all will continue working very closely together.

This is not big corporate aviation. It is still small companies with very high owner participation, doing what we love.

I personally look forward to continuing to work with both AFS and Dynon.
 
In my opinion, and that is all we have, I think this is a very good move.

Dynon has always been a VERY well run and cashed company. Not informed about AFS but their product is good.

This is not unlike many car companies, well lets say European ones, some in the USA have not been a good example.

Best products on the IFR market in my opinion. I fly behind G1000 at times and the engine monitor sucks, the rest of the system is not nice either. The other Garmin gear is good, Aspen is nice but overall the best two I have had experience with including many of the other experimentals has been AFS and Dynon so the deal has the best potential for all customers in my opinion.

Well done.
 
I've never seen an acquisition quite like this. Buying a direct competitor, keeping them fully intact (with no integration) to continue to compete against you. It seems ridiculous on the face of it, but it may turn out to be pure genius if you examine it closer.

Lets think about this, Garmin is the obvious big kid on the block because of their reputation and resources. If AFS goes away, Garmin's market share will most likely jump significantly and Dynon would have a hard time not losing ground to them and maybe even fading away if momentum really swung.

The alternative to this move for Dynon would be to take the money they used to buy AFS and expand. That would be much more difficult to do than buying the infrastructure, IP and reputation that AFS already has in place. Doing that, you not only do you keep AFS as a player in the game, but you make them a stronger player. To me, this has everything to do with taking on the big kid on the block with some help from your friends. Without Garmin strongly entering the homebuilt market, this acquisition may not have happened...just MHO.

Time will tell how successful this strategy will be, but I think this is a good move for us, as consumers. More players in the game is always better than fewer, even if two of them are funded by the same source. I think its clear that Dynon and AFS are passionate about their business and I like that. I wish them luck.
 
Apples and Oranges, now a fruit salad

For anyone who has sat or flown behind both the Skyview and the AFS Decks know how completely different they are. As Stein has quoted many times, they are for different missions. But with everything both companies can bring to the table, I also see this as a very positive merge meant to truly benefit the consumer. With such a small, but widely diverse target market in the terms of mission/budget needs, creating an environment that will let Rob and his crew continue to advance his product and bring down the prices to more than compete with Garmin is a win win for us. I put the AFS AoA in my wings and am in the process of deciding which pitot to run, and by the time I am ready to pick which EFIS will be right for me, hopefully it will be as Dynon says and much cheaper. Only time will tell, but I am very optimistic.
 
Should be good

I have been wrapped up in recurrent training in Lafayette, LA and have had limited access to computers. When I saw this, I had mixed emotions. I am a huge fan of AFS and have two 5500T's going into my new plane. The current plane has a Dynon 10A.

I have always seen these as two quite divergent companies. Dynon focusing on the more entry level, cost effective and very dependable equipment. And I've viewed AFS as the next step up in quality and capability.

If, and it is a big if, they can definitely remain autonomous it should be a very positive step in the right direction to providing a couple of levels of very high quality equipment.

I think we will all benefit and bring out choices to another level.
 
Likewise sentiments Darwin. I sincerely hope that, long-term, AFS remains completely independent. I guess we'll never really know details, but if it was for manufacturing ability, why did it take a full-blown buyout? Couldn't something less... "drastic"... have been agreed to between the companies? And which Rob contacted whom first about this? :)

Oh well. I'm crossing my fingers also. Extremely big fan of AFS, fully committed to having them in my plane when I get to that point in the build.
 
I'm guessing that AFS will be leveraging off of some of Dynon's in-house capabilities, like an AHRS rather than buying the Crossbow/Memsic which should help keep costs down. Also, Dynon probably has more manufacturing capability as has already been stated. And of course, engineering collaboration, which is the latest management buzzword.
 
I have thought about this for a while and make the following conclusions:

1) I am sure these guys have both found times tough in recent years

2) Big company R&D budgets are hard to compete with, these two companies have done it on a comparative shoestring. Remember they have much smaller volumes of sales to spread their R&D costs over.

3) They have forced the big companies to improve their products (and prices) for the home built market.

4) If they mess up, there are some VERY smart people tech and business people in the home built environment who, more out of annoyance than anything else, will start making superior products.

David
 
As others have said, it doesn't make a whole lot of sense to acquire a competitor and then compete against yourself. If they were truly interested in utilizing the resources of each other, there are other vehicles to do that such as a joint venture etc. I don't see how a straight up acquisition makes sense unless you are acquiring IP to fold into your own product or realize significant synergies (read cost cuts). In either care you would then essentially absorb the acquired company. One of these companies won't exist in its current form in the next 3-5 years.

My theory is you need scale to compete with the Big G which is why other experimental avionics mfgs have exited the market and this is the way to get it. But you can't continue to run two different product lines and realize the benefits. You will need to choose one and go with it.
 
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Dynon-AFS

With both AFS (3400) and Dynon (D-10A) in my -8 this sounds good. I've been committed to two completely separate systems because of few common failure paths. Sounds like a winner to me!
 
NavyS3BNFO said:
As others have said, it doesn't make a whole lot of sense to acquire a competitor and then compete against yourself.
Click to expand...

Somehow I just do not see things this way-------I see it as capturing sales that otherwise would have gone to a competitor.

Why do you think car company's make so many different models??
 
Interesting developement. It could go either way I suppose, but it's not an uncommon thing to have two product lines that are closely related/competitive but manage to support one another. Just a few of examples:

Chevrolet - GMC

Ford - Lincoln

Honda - Accura

Toyota - Lexus
 
At least AFS didn't go the way of Blue Mountain! I worked on a project where we used Blue Mountain Engine monitor and EFIS and, when they went belly up, we ended up switching over to MGL. I'm glad it wasn't my money funding the project! I've been planning my RV8 panel around a dual Dynon Skyview system but, in the back of my mind, I keep thinking about Garmin. Not because I think Garmin is any better but because I know they will be here in 10-15 years. I don't know, is it worth the extra $$$?:confused:

Scott
 
I certainly have mixed feelings regarding the buyout. I have to admit my first reaction wasn't good. It seemed more like a act of desperation rather than a sound business strategy. I am certainly hopeful, like others have said, it is a stroke of genius. I know Rob did what he thought was best for his family, employees and customers and I wish them all the best both personally and professionally. Rob and his wife are some of the greatest and kindest people you'll ever meet.

AirVenture for AFS and Dynon will be interesting. I think the main topic at the AFS booth is going to be "why should I risk my money on AFS products" instead of showing me what your product offers. It's going to be a really hard sell and the typical sales cycle just got longer. This could also impact Dynon sells if customers are not convinced of the business strategy or that product lines won't eventually be eliminated between the two companies in order to get a "best of breed" solution to compete with Garmin and eliminate unnecessary duplication to rein in cost. Future customers get the benefit, but current customers could get screwed. Nobody wants to buy a product that gets eliminated soon after they purchase it. Look what happened with TruTrak's EFIS. Not sure if that had anything to do with the murky partnership with AFS or not.

I'm sure the salesmen in the Garmin booth will be in high gear taking every advantage of the confusion and uncertainty that customers might have and convince them that their product line is stable, expandable and affordable so why risk your money with Dynon/AFS.

As for me, I was strongly considering upgrading my dual 4500's to the new 5000 series. I'm really conflicted about it now because I really appreciate doing business with Rob/AFS and trust his products but unfortunately AFS is no longer his company and I have serious doubts about the continuation of the AFS product lines. Time will tell.

Just my .02 worth. ;)
 
I can see this like Toyota and Lexus. One focusing on the "entry level" equipment with the other on the more "advanced" level equipment. These are two different markets and trying to cover both with one line of equipment can be like having a jack of all trades become the master of neither.

I for one am an avid Dynon user and wish them good luck with this. Only time will tell how good a decision this was.

:cool:
 
kbehrent said:
.....Look what happened with TruTrak's EFIS. Not sure if that had anything to do with the murky partnership with AFS or not.
Click to expand...

I'd like to clear this up once more. The discontinuation of the Trutrak EFIS was 100% due to the fact that SEVERAL components used in its manufacture were discontinued by the suppliers. We had absolutely no recourse to get any parts. Rather than invest a large amount of resources in completely redesigning the hardware and software of the product, we decided to discontinue the manufacture of it. This is one of the primary reasons that we now offer the full line of Advanced Flight Systems products for sale through Trutrak. Support for our EFIS and EMS systems will continue into the future, we simply don't offer it for sale any longer.
 
Best Wishes!

I am not an expert in business administration, but are we at the dawn of a new business model?

Is it possible that small competing companies, collaborate between them, not to become big large corporations, but just to maintain their feasibility and capacity of being innovative and keep serving a market?
If that?s true, we are living very interesting times, were in place of big corporations becoming increasingly fat and slow, we?ll see thriving smaller companies producing very innovative and good products as the Dynon and AFS EFIS and other stuff.

Personally, I would like to add, that these two companies run with excellence, innovation and passion to serve a small market market made of we equally passionate aviation amateurs, deserve the best wishes for they success!

Guido Spaini
 
The way I look at it, competition is good for consumers. This type of deals inherently reduces competition, hence not good for consumers.
 
I don't think Dynon/AFS will be disclosing their strategy on this forum!

Here's my thinking: Dynon needs to invest more in developing avionics products that will compete with Garmin (and others). In the past, they have licensed products (Trig Transponders) or used 3rd parties for development (VHF Com, intercom). They need more resources to invest in owning critical technology (IFR Certified GPS, Certified Avionics?)

AFS represents a skilled group of engineers who can help the combined company develop these important products moving forward. Not only that, the existing AFS product revenue will help pay for these added resources.

The bottom line is that the combined company has additional financial and engineering resources to reinvest in a competitive market. This is all about eliminating redundant capability and investing in new products to compete head to head with Garmin.
 
To add some weight to what Lucas is saying, I would like to chime in here.

Lucas's problem is reality. As avionics manufacturers we have the exact same issue. Most critical electronic components are now single sourced. If the manufacturer of a chip decides to dump it you can't do anything about it other than redesign with something else. Your quantities do not warrant the chip maker from making the chip if you are one of the few using it.
In the past you could be fairly certain that a chip would be available for a long time. This is no more. A chip can now be discontinued 1 or 2 years after it was released to big fanfare,
We have had to stop our V10 radio because of this. We are only now putting it back into production after an expensive redesign. Almost all our avionics is being periodically redesigned in some way or another to cater for components we can no longer get.
There is a whole new industry around obsolete components. Component traders buy remaining stocks the moment something gets discontinued and then try and screw every last $$$ out of every manufacturer that desperately is looking for that component. Chinese are stepping in producing fake chips to make a quick buck (the chips look right but there is nothing in them at all).
It's terrible and is the bane of any small electronics manufacturer anywhere in the World. But it does not help complaining. We just get on with it.

Regarding one posters comment related to experimental aviation being the only growth segment in aviation. Unfortunately that is not true. A quick glance at aircraft registration numbers over the years shows the real picture. Increased costs and bureaucratic hurdles (especially in parts of the World outside the U.S.) do not bode well for the future.

Is experimental aviation niche ? Yes, of course it is. I wager most of us do not do this because we want to make lots of money (there are much easier ways I guess) but we do this because we love aviation and this is something we can do. Because of this, those that love building avionics will not go away until the last plane has been built...

Rainier
CEO MGL Avionics

TrutrakTech said:
I'd like to clear this up once more. The discontinuation of the Trutrak EFIS was 100% due to the fact that SEVERAL components used in its manufacture were discontinued by the suppliers. We had absolutely no recourse to get any parts. Rather than invest a large amount of resources in completely redesigning the hardware and software of the product, we decided to discontinue the manufacture of it. This is one of the primary reasons that we now offer the full line of Advanced Flight Systems products for sale through Trutrak. Support for our EFIS and EMS systems will continue into the future, we simply don't offer it for sale any longer.
Click to expand...
 
I must have missed Stein's comments about the differential focus/purpose of the Dynon and AFS avionics lines: "...they are for two different purposes..." (?) or something to that effect. Can some one fill me in?

Thanks,


Lee...
 
Mixed feelings.

Mixed feelings. But I have been worried about all the EFIS manufacturers lately(except big g).

I own Garmin a little Garmin stock. (AFS in my panel) But...

I do not want Garmin to be the overwhelmingly dominant(only?) supplier of EFISs. We will be the big loser in that equation. Have you paid your 430 subscription to Jeppeson lately? I believe their current G3 prices are all about domination of the market. If that happens I have very little faith that the current reasonable map subscription cost will remain reasonable. And how boring will it be for the only question about the panel: "How many G3s do you have?".

If chip availability is the issue; hopefully this merger and maybe even some agreements between Dynon/AFS, GRT, MGL etc to all use the same chip would bump up the volume to keep it in production longer. Maybe it is viable for all of these guys to get together and make their own chip such that they will not have to redesign as often.
 
logansc said:
I must have missed Stein's comments about the differential focus/purpose of the Dynon and AFS avionics lines: "...they are for two different purposes..." (?) or something to that effect. Can some one fill me in?

Thanks,


Lee...
Click to expand...

Both vendors have solid products.

Dynon is a solid VFR platform that targets most of the experimental community on a tight budget.

AFS has more bells and whistles at the moment that provide more functionality to the IFR crowd and to those wanting the additional features.

I made the decision to choose AFS from my RV-10 due to it being a solid IFR platform and the rate of innovation and the responsiveness of addressing issues when they arose. Once Rob starts shipping the 5000 series/touch screen upgrades for the 4500s, I'll be a happy camper.

I think Rob's engineering team and Robert's manufacturing sourcing should yield some great synergy. Like the Honda/Acura and Toyota/Lexus analagies, I suspect it will allow AFS to concentrate on the high end market and Dynon more of the entry to mid level market. But that's just my opinion.
 
Bavafa said:
The way I look at it, competition is good for consumers. This type of deals inherently reduces competition, hence not good for consumers.
Click to expand...

Not necessarily. On the face of it, it's easy to asses this as reducing competition, but consider that by pooling resources, Dynon and AFS may be better able to compete against Garmin. This is, of course, a strictly hypothetical scenario, since I don't have the inside scoop on what was going on at Dynon and AFS...but I think it's a bit simplistic to just blindly label this as a reduction in competition simply because two companies merged. I think the situation is quite likely more complex than that.
 
vlittle said:
If I was GRT, MGL, TT or VP I would be afraid, very afraid...
Click to expand...

I wasn't going to chime in here, but since you mentioned us... GRT has great stability, low overhead and solid goals for the future. We are not afraid.
 
KatieB said:
I wasn't going to chime in here, but since you mentioned us... GRT has great stability, low overhead and solid goals for the future. We are not afraid.
Click to expand...

GRT makes a great product at a reasonable price, and has excellent customer service. I'm not worried for you guys :)
 
Innovation frequently is from the smaller companies. I see Big G is touting its newest feature - a green arc on the map showing where you'll intercept the set altitude. A feature that GRT has had for years.

I sure hope you (I mean all the small companies) stay around.


[ed. Didn't the G1000 have this feature back in 2009? My uneducated guess, Bob, is they are simply migrating certified, top-level code downward into the experimental stuff. dr]

Edit reply: maybe, I don't know. Just commenting on what's posted today on VAF.
 
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KatieB said:
I wasn't going to chime in here, but since you mentioned us... GRT has great stability, low overhead and solid goals for the future. We are not afraid.
Click to expand...

Sounds like an Eminem (from Michigan too) song:) "We are not afraid"
 
Mike, I root for the underdog as much as anyone else, and Garmin is an easy target because they're big (well, bigger) and all. I don't see anything that they've done that has been anti-competitive, though. Their experimental offerings are not priced all that aggressively -- they're on par with Dynon from what I have seen. They're supporting some non-Garmin products such as autopilots. They're just big because they're an older company with a broad product line, including consumer stuff (and seriously, who in their right mind wants that market??) and in the aviation market they have spent BIG money to get their products certified. Personally, I'm a little surprised that there are as many experimental EFIS manufacturers as there are. Given the size of the market, I'd expect to see about half as many.

As for the Dynon/AFS deal, I wish them all the best. I don't recall ever seeing a deal like this really result in two "separate but equal" companies and product lines that just happen to be owned by the same people. The Honda/Acura and Toyota/Lexus comparisons are not exactly spot on, because Lexus and Acura (and Infiniti, and so on) were created as brands for marketing higher-end offerings from manufacturers not exactly known at that time for building luxury cars.

I know it could work, and I know how I'd make it work, but I'm sure they have their own business plan. I'm looking forward to seeing how all of this shakes out. I'm at least a year out from making any panel decisions, so I'm glad the Garmin expansion into the experimental market and this deal are happening now, not when I'm trying to actually make a decision. For those who are making their buying decisions now, I feel for you. I'm glad I'll be able to let things stabilize for another year or so.
 
Good business

I'm with you Dale. We are both about the same place in our build.
I agree. This may be a blessing.
Now as for engines...:eek:
 
I can just imagine the two Robs sitting back enjoying a cold adult beverage, and reading this thread..............
 
Disclosure: I LOVE my RV-12 Dynon Skyview. I LOVE my Garmin auto Nuvi. I LOVED the Garmin 430 we put in our Bonanza. The rise of Garmin has been one of the most important things in avionics ... Ever.

In the South we have a saying: You dance with who brung ya. Garmin stuff is GREAT but often just "barely" affordable. And updates? Very expensive... But then it is very expensive to create TSO avionics and they stepped up with the investment and capability and revolutionized the industry. Years elapse, and now we think of them as Microsoft... And with some justification.

In the experimental world I think we do ourselves a long term favor to ensure avionics competition. Keepthat in mind as you make your buying decisions.
 
Kind of reminds me of when...

...JPI bought Vision MicroSystems. VM is now dead. What'd that take, about 3-4 years?
 
Merger facts for dummies

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