GoPro CEO Nicholas Woodman announced the plan last month at the Code Conference, to a lukewarm reception.
39-year-old Woodman sounded like a pantomime actor as he repeatedly asked the crowd whether GoPro should build a quadcopter. His attempt to incite audience participation was not well received, and he made the announcement to little enthusiasm, writes Ryan Mac for Forbes.
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Drone move to prove company can innovate
GoPro dominates the action camera market, but has now started to market itself as more than a camera company. Rumored, and existing, forays into media and content are one thing, but building a drone is a completely different undertaking.
“They invented the action camera category and there’s not many more features that they can offer [on the cameras],” said Michael Pachter, an analyst with Wedbush Securities. “GoPro wants to show that it’s innovating.”
As well as innovating, GoPro will have to play catch up to more established drone manufacturers such as 3D Robotics and DJI, which sold its first commercial drone in 2013.
In the year since its IPO, shares in GoPro are trading at almost double the initial sale price of $24. However the stock is down from last fall, and GoPro must be hoping to drive further interest in its stock with the announcement of a drone. Shares jumped 6.5% on the day of the announcement.
A natural move for camera maker GoPro
Many analysts claim that the move into the drone market is entirely logical for GoPro. “Consumer and commercial drones are regularly used at sporting events like skiing, snowboarding and surfing–the same places where GoPro rules,” said Bilal Zuberi a partner at Lux Capital. “So it makes sense that GoPro does not want to leave that field open for DJI and others, and hurt its standing as the dominant brand among sports enthusiasts.”
3D Robotics CEO Chris Anderson claimed that there is a “natural synergy” between drone fans and GoPro users. The two companies are currently partners, with GoPro the official camera for 3D Robotics “Solo” drone, but the eventual release of an in-house GoPro drone would put that relationship in danger.
Anderson foresaw GoPro’s move into drone manufacturing after they poached former 3D Robotics product management director Pablo Lema. Anderson does not see the drone industry as a zero-sum game. However it is thought that DJI sees things differently.
The two companies were previously negotiating on a variety of deals, but differences over profit sharing meant that the proposed partnership never materialized. “Initially [GoPro and DJI] wanted to make a product together for GoPro to sell, but the negotiation never came to fruition,” DJI CEO Frank Wang told FORBES. “The deal came out to roughly this: GoPro would make two points of profit, and I’d make one point.”
Speed of the essence in drone market
Relations appear to have soured between the two companies, and DJI is now developing its own cameras, which Wang believes offer better performance than GoPro’s.
Woodman must move quickly if he is to make an impact in the drone market. Sales of DJI products are expected to double this year after recording $500 million in revenue in 2014. The market is growing fast, and GoPro risks being left behind.
In contrast GoPro sales have slowed since doubling or tripling each year up to 2013. Growth was still up 42% to $1.39 billion in 2014, but the signs are not encouraging. Drones are far more complex to make than cameras, and GoPro has a lot of work to do on both the hardware and proprietary software.
The company gave no information as to when a GoPro drone would reach the market, but as a point of reference DJI and 3D Robotics took seven and six years respectively to release their first drone.