GoPro shares plunged more than 8% on Monday, and went down another 2.67% in pre-market trading Tuesday. The decline was triggered by a Barron’s report over the weekend that claimed that GoPro stock could fall to $25. Alexander Eule of Barron’s said the San Mateo-based action camera maker was a “one-product wonder” like BlackBerry and Palm. But Eule ignored some fundamental reasons why GoPro was not another BlackBerry.
GoPro is a lifestyle brand, not just a hardware maker
Of course, the company faces intense competition from the likes of Xiaomi, Panasonic, HTC, Sony and others going forward. Barron’s pointed out that Apple had the capability to build an action camera in-house. It is not wishful thinking that Apple builds a comparable or superior camera, and uses its might to steal market share from GoPro. However, GoPro CEO Nick Woodman says there is “zero reason” to believe that Apple is developing a GoPro competitor.
Where GoPro differs from BlackBerry is product aesthetics. The action camera maker has focused on the “beauty” and “coolness” aspects of its cameras. It has become a lifestyle brand rather than a hardware company. It has used social media and user-generated original content to strengthen its brand and make people fall in love with its content. That’s the main reason GoPro cameras have been selling like hot cakes despite rising competition from Sony, Panasonic, Xiaomi and HTC.
GoPro is doing something BlackBerry didn’t
BlackBerry used to boast of specs, features, and security advantages. It couldn’t develop a loyalty and consumer appeal that GoPro now commands. In fact, the San Mateo-based company is using the same strategy of appealing to design and beauty rather than specifications that Apple adopted to dethrone BlackBerry. GoPro developed a camera that people would love, and created a lifestyle culture surrounding it, which will be difficult to imitate for any competitor, says L&F Capital Management.
What’s more, GoPro is actively leveraging its brand popularity to expand into new verticals like virtual reality and drones. It is transforming itself into a media company. In contrast, BlackBerry did not leverage its brand to build a presence in other areas, at least not until Apple launched the first iPhone.