When GoPro launched its first all-terrain cameras in 2010, it was essentially harnessing a market that had a need to be fulfilled.
Unfortunately, with a Smartphone in every pocket and a camera in every Smartphone, the GoPro is less of a necessity today than it is a novelty for extreme sports fans on the go. That’s the uphill battle GoPro seems to be facing, at least, in 2016.
Massive Losses Projected in 2016
Although GoPro reported a $36 million profit in 2015, the projections for 2016 are grim.
An S&P Global Market Intelligence analysis estimates GoPro may lose as much as $167.5 million this year, more than 10 percent of its 2015 value of $1.62 billion. Although the company managed to capture over 70 percent of the US video camera market in 2010, as reported by the Wall Street Journal, and has sold over 20 million cameras since launch, its attempt to go more mainstream has fallen somewhat flat.
The release of the Hero4 Session camera, an ice cube-sized camera with just two buttons and priced at $399, was meant to bring more average people into the GoPro family. The Hero4 Session wasn’t designed with extreme sporting in mind; instead, it might be placed in a nursery or be used to capture important moments. Unfortunately, it flopped, even as prices were slashed to as little as $199. All told, this venture cost the company about $40 million in lost revenue.
Approach to Video
Much of GoPro’s current situation may be due to its two-step approach to video. The camera’s videos still require an upload to a computer before they can be edited and shared, a step now completely eliminated by Smartphone technology. GoPro is attempting to address this problem, however. Just this April, it acquired two video-editing software companies, but at this point it’s hard to say if it’s too little, too late for GoPro to really capture hearts and minds beyond its existing niche market of extreme sports enthusiasts.
New partnerships with BMW and Fisher-Price may put GoPro technology into places it’s never been before, giving GoPro a different avenue for expansion. These tough, small cameras can be useful in a variety of applications, but the vast consumer market may not be the right place to get the company back on the path to success.