GoPro Inc (NASDAQ:GPRO) already makes action cameras for drones. And its customers are creating “jaw-dropping GoPro footage” from quadcopters. Last week, The Wall Street Journal reported that the Sam Mateo-based company was working on consumer drones that will be launch in late 2015. Its drones will be priced between $500 and $1000.
GoPro has joined a drone-lobbying group
Dominic Basulto of The Washington Post says that GoPro could become the “innovation champion” of the consumer drones industry, just like Apple in the smartphone industry, Facebook in social networking and Amazon in e-commerce. The action camera make has joined the Small UAV Coalition, a drone-lobbying group, indicating that the company is serious about consumer drones.
Joel Greenblatt Owned Hedge Fund On Why Value Investing Isn’t Working Now
However, the consumer drone market is still in its infancy. According to Teal Group, the worldwide UAV sales will almost double from $6.4 billion this year to $11.5 billion in the next 10 years. Civil UAV account for only 11% of total sales. Consumer drone segment, which includes personal, hobbyist drones rather than search-and-rescue ones, is even smaller.
According to the Consumer Electronics Association, consumer drones market will be worth $130 million in 2015. By comparison, GoPro has generated $673 million in sales in the first nine months of this year. Over the past few months, Google and Facebook have acquired drone companies. Amazon is also working to use drones to deliver goods. But none of them have made drones for consumers.
GoPro can make consumer drones mainstream
There are only three major consumer drone makers, and all of them are pretty small. China’s DJI Innovations generated $131 million in sales last year. France’s Parrot reported sales of $53 million, while California-based 3D Robotics is even smaller. So, GoPro won’t have to knock off a Goliath to become the consumer drone leader.
GoPro has several advantages that could make it a consumer drone leader. These include the first-mover advantage and network effects. However, it will have to create an ecosystem that makes rivals impossible to catch up. Basulto says GoPro is the only company that has the potential to make consumer drones mainstream.
GoPro shares were down 0.81=8% to $71.35 at 12:20 PM EST on Friday.