GoPro could be pinning its hope on Apple for revival after it recorded a disastrous holiday quarter. The company hopes that its chance to survive is to make cameras work better with phones, according to MarketWatch.
GoPro to make smartphone-friendly products
During a call with analysts on Thursday, GoPro executives stated five priorities for 2017. One of those priorities was pitching its products for smartphones, a competitor to its dedicated action cameras. Even though the company claims that its cameras shoot better video, more or less, that is the case with every smartphone which can share videos or live streams directly to social networks.
GoPro founder and Chief Executive Nick Woodman stated that the company is looking to “make the smartphone central to the GoPro experience.” The development of new camera products will have smartphones playing an even bigger role. Woodman did not reveal any new product plans but said that it aims to make the smartphone more seamless with its cameras.
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Might be a good buy for Apple
GoPro might be a good option for smartphones that want to add greater functionality to their devices, such as the iPhone. Apple might find this acquisition worth it as it has invested in products that interact and contribute to the iPhone experience, including the $3 billion deal for Beats — its largest acquisition to date — and the launch of the Apple Watch, notes MarketWatch.
There was a strong feeling across Wall Street about the potential acquisition even before GoPro’s earnings announcement. Richard Windsor, an analyst with Edison Investment Research, stated that both GoPro and Fitbit “have further to fall, leaving them open for acquisition.”
On Thursday, the company reported worse-than-expected fourth quarter results and a grim outlook for the first quarter. Shares declined more than 11% in late trading. The company went public at a valuation of $3 billion and had a market cap of over $14 billion at one point in time. Now it could drop to as much as $1.5 billion.
Even though the camera maker disappointed with its earnings numbers, its research and development costs surged to $92.7 million, compared to over $66.4 million a year ago. Sales and marketing costs also surged from $82.6 million to $112.7 million. The company has not offered a profit forecast but expects operating expenses to come down to somewhere between $168 million and $178 million, compared to $239 million in its last quarter.