GoPro shot to prominence as a seller of action cameras, but the company recently released the Karma drone in a bid to revive its flagging fortunes.
Last week GoPro released the Karma drone to the world and entered a new era. No longer will the company rely on the saturated action camera market for success, but now has an extra string to its bow, writes Kyle Stock for Bloomberg.
Karma drone needs to be a success for GoPro
GoPro made a half-hearted attempt to become a media company, but it is still a hardware business. Success ultimately rides on whether it can release new and exciting devices that will sell well.
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In 2015 the company released the Hero4 Session camera, which was ultimately a failure. As a result, sales were slow and, shares in the company dropped in price, remaining low until today.
This Thursday GoPro revealed that sales were down 40% for the quarter ending September 30, to $241 million. The stock was down by 7% leading up to the news, and a further 20% of its value was lost after hours.
According to CEO Nicholas Woodman, Q4 results will be vastly improved thanks to the Karma drone and a new GoPro camera. He says that the company will surge back into profit and see the second-best period of sales in its history. “These are the best products we’ve ever made,” said Woodman.
DJI Mavic Pro to provide stiff competition
Unfortunately, some commentators are not so enthusiastic about the drone. It may be slickly designed and packaged, but you can’t program it to follow you, can’t avoid obstacles by itself and doesn’t work in conjunction with a smartphone.
These may sound like a set of arbitrary features for a drone to have, but the reality is that the DJI Mavic Pro has them all. The rival device was announced just a few days after GoPro released the Karma drone.
DJI is the biggest company in the drone space, and its Mavic Pro drone has all of the aforementioned features as well as flying higher and farther than the GoPro Karma drone. It is also smaller and lighter than its rival.
Filmmakers not keen on fisheye lenses for drone footage
Another issue with the Karma is its use of GoPro’s fisheye lens. Thanks to its wide-angle format, GoPro cameras are great at videoing subjects that move in and out of the frame. This is great when you are on a pair of skis, or attach a camera to your dog.
That said these benefits are not apparent when the GoPro cameras are at altitude attached to a drone. The problem is that the fisheye makes the world look bendy, which could be a problem if you are trying to capture realistic footage of an event from above.
One ski film company called Level 1 Productions has had the lenses of its GoPro cameras replaced to combat this problem. It also used the DJI Phantom IV drone for around 15% of its latest film.
“The camera is rock-solid,” Level 1 founder Josh Berman said of DJI’s drone. “And it basically flies itself.”
While DJI may make the best drones, GoPro may not need to beat it for the Karma to sell well. The world drone market is set to explode in the coming years, with a growing number of industries making use of the technology. This could drive sales.
GoPro could ride the drone wave
Another point in the company’s favor is that it doesn’t need to make the biggest selling drone. The Karma is part of an ecosystem of products and will carry sales of other devices.
The idea is that those who buy a Karma will be more likely to buy a GoPro camera, and vice versa. A recent Bloomberg survey revealed that this is sound thinking: 39% of respondents who own a point-of-view camera said that they would consider buying a drone with a retail price of over $500.
GoPro is selling the Karma drone for $799, while a drone and Hero5 camera bundle costs $999. This is slightly cheaper than the DJI Mavic Pro.
“It looks to be a pretty well-refined tool geared toward amateurs crossing over into low-end professional production,” said Berman, the ski-film guru.
As part of the push, GoPro is investing in software and apps that will make uploading, editing and sharing videos and pictures a whole lot easier. As a result spending on research and development has increased sharply.
According to Bloomberg Intelligence analyst Jitendra Waral, this development can’t come soon enough. “It’s a nightmare,” he said. “Just look at something like Google Photos; all you do is take the picture, and they do the rest. This is the direction GoPro is finally going in.”
The evidence is provided by the fact that the new Hero5 Black camera is capable of uploading footage automatically. GoPro will also release an editing platform for home use called GoPro Plus.
“By the end of the year, GoPro is going to be much more of an ecosystem company and an end-to-end solution for our customers,” Woodman told analysts on a conference call in July. “Whereas in previous years, we were primarily focused on enabling the capture of experiences.”