GoPro announced plans to enter the drone market in the first half of next year, and a recent survey suggests that it’s a good move. The same survey found mixed results in terms of demand and interest for the company’s action video cameras, although there is a logical reason for that.
GoPro camera interest may be solid
On Monday, Raymond James analyst Tavis McCourt reported on their recent survey of smartphone owners regarding purchase intent and interest in GoPro’s cameras and upcoming drones. One of the data points they looked at was Google Trends data, which appeared to run counter to data from other sources in terms of interest in the company’s cameras.
During the second quarter, Google Trends data for the keyword “GoPro” decelerated from a year over year growth rate of between 20% and 40% in the first quarter to between 0% and 20% in June. In most cases, this would suggest that sales growth is slowing down, but McCourt said the result is “notably inconsistent” with both management guidance and their recent surveys. (All graphs are courtesy Raymond James.)
Why was Google Trends data down?
GoPro management guided for a slight acceleration in year over year growth for the second quarter. McCourt’s survey work also suggests this.
As a result, he suggests that the Google Trends data was impacted by last year’s initial public offering. He believes the number of searches in May and June of last year was significantly more because of the IPO. Investors would have been searching for the company to learn more about it and decide if they wanted to grab any shares in the IPO, which he states would have artificially inflated the search volume on the keyword “GoPro.”
When looking out at two years, he states that the volume of search growth is “very stable and even accelerated slightly in June.”
GoPro’s market share expected to increase
The Raymond James analyst also reports that his survey suggests ownership of GoPro cameras will keep rising as 17% of the survey’s participants said they plan to buy one. In the previous quarter, the survey suggested 14% of people plan to buy one.
Further, he said the company’s share of the market is also likely to increase. GoPro already holds a significant portion of the current action camera market, according to the firm’s survey with 54% of current action camera owners having one of the company’s cameras. GoPro’s share of future purchase intentions has grown to 73%.
Other data points are positive for GoPro
Data from Amazon and Best Buy also indicates that GoPro continues to dominate the action camera category based on the top ten and five best-selling action cameras.
McCourt also found that online engagement with GoPro videos is rising nicely. He found about a 50% year over year increase in views on YouTube.
The company is also enjoying steady growth in subscribers for its YouTube channel. In fact, GoPro’s subscribership on YouTube is growing faster than Apple’s.
One area in which GoPro might be slipping is average selling prices. While they’ve remained flat between the first and second quarters in the U.S., in Europe, online price checks suggest the last quarter’s price increases may have been rolled back to their previous prices during the second quarter in some countries. However, they still remain consistent with last year’s prices.
GoPro’s drone expected to be a success
This was the first time McCourt asked his survey participants about GoPro’s planned drone, and he did find some interesting results. Only 5% of them currently own a drone, and 12% plan to buy one at some point. These are certainly quite small numbers, but he notes that the percentages are similar to those of GoPro’s cameras a couple of quarters ago.
The analyst found that 26% of the survey’s participants are interested in buying a drone or quadcopter to take vides. That’s a higher level of interest than the respondents he surveyed regarding fitness or activity trackers one year ago. McCourt suggests that GoPro’s opportunity in the drone market could end up being as big as or possible even bigger than it has been in the action camera market.
As of this writing, shares of GoPro were up 0.08% to $53.25 per share.