Drone technology has huge potential, but consumer demand doesn't seem to have much more room to grow.

In this clip from Industry Focus: Energy, Motley Fool analysts Dylan Lewis and Taylor Muckerman explain a few reasons that the consumer market for drones may have already hit saturation and how investors might want to buy into the drone market without too much risk.

A full transcript follows the video.

This podcast was recorded on Nov. 17, 2016.

Dylan Lewis: Time and time again, we've seen these more niche-type devices seem like they have humongous market potential, and people get really excited about them, and they hit saturation a lot faster than people realize because they don't have mainstream appeal.

You look at what's been going on with GoPro's (NASDAQ:GPRO) main segment, the action cameras -- I believe they're down 40% year over year the last couple quarters in their top line. Most of the fact there is just, they've hit saturation with that market. Some other historical examples that prove that out: You look at Garmin, this was a company that was a GPS manufacturer and a smartwatch manufacturer. I looked at the books, they have less money coming in on the top line now than they did in 2007.

Taylor Muckerman: They were blindsided by Google Maps on your phone, absolutely.

Lewis: So, in that case, they lost out to all-encompassing technology that really rendered their main product obsolete. But any time you're looking at something that has a very dedicated single use, I think you have to wonder: Are those really gaudy numbers we're seeing analysts forecasting reasonable, or is this more of a hobby device?

Muckerman: And with drones, I've flown one or two, and getting behind the controls can be intimidating, especially if you're talking about a device that costs more than $1,000. Maybe a little bit nervous about being the cause of it falling out of the sky, much less the drone being the cause. When you look at this industry, GoPro might be, maybe, the only public-facing way that investors can get into it right now.

Lewis: Which is unfortunate.

Muckerman: Yeah, they're brand new to the segment. I mean, you have companies like DJI, which might make the best consumer drone, I'm not sure. It has a great reputation.

Lewis: I've seen their market share number floated somewhere between 40% and 60%. So, they own the drone market.

Muckerman: Yeah. So, maybe they'll be bought by a company that's public. But at the moment, GoPro is really the only accessible way for an investor to profit if this industry grows.

Lewis: If you're looking at manufacturers, specifically, yes.

Muckerman: Yeah. There's sensors and everything, right?

Lewis: Yeah. You have a name like Ambarella (NASDAQ:AMBA), and they are basically video processing chips. The nice thing about them is, you are not anchored specifically to one manufacturer or one device type. They're outside of drones. They supply GoPro, they supply DJI, they also supply TASER's Axon body cameras. So, they're a little bit more diversified there. But yeah, I think a lot of people were hoping that, with GoPro, there'd be some way to publicly invest in drones. I think, if you're still looking for that, I would hold expectations a little bit, just because, if you take the run-rate that they were on -- like I said, 2,500 units over two weeks, you put that over the course of a quarter, and that's during a launch, so you would think demand has to be pent up ...

Muckerman: As heavy as it can get.

Lewis: You say, roughly, they'll sell about 16,000 units during a quarter. Assuming people buy the more expensive bundle with the camera included, that $1,099 price point I talked about, that means they're bringing in around $18 million on a quarterly basis. This is a business that does over $200 million in revenue per quarter. So, it's a 10% increase or so, but it's not something that's dramatically going to move the needle in a really impactful way. We don't know exactly what those margins would look like, either. So it's tough to know how that would trickle down to the bottom line. Point is, it didn't go well for them when they tried to launch.

Muckerman: No, crashed and burned so far.

Lewis: It'll be interesting to see how they handle it. But, if you're still banking on GoPro being a really great drone play, realize that they have a lot of work to do to recover. Even if things had gone swimmingly, it still wouldn't have been a huge part of the top line for them.

Muckerman: Yeah. When you look at expectations, the market knew they were coming out with this product, probably baked it into some of the pricing. So, now you're going to see some ramifications of that being backed out of the top line, since now they're having to fork over some cash, and maybe some writedowns here in the coming quarters, as expectations aren't going to be met.

Dylan Lewis owns shares of Ambarella and Taser International. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Ambarella and GoPro. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. The Motley Fool recommends Taser International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.