It seems focusing on a niche market may be a losing strategy for GoPro. Their recent earnings report was shattering, for investors, employees and the industry of small businesses servicing the extreme – or aspiring-to-be-extreme community. Revenues of $183.5 million were around half of last year’s reported earnings. The share price took a battering falling to a 52-week low and losing 6.8% in a single day. This trend has continued and so far the company has lost over 17% off it’s share price.
When first released, pundits were quick to applaud GoPro’ strategy of specific targeting within a niche group. The action cameras were easy to use, rugged and backed by word-of-mouth marketing from some of the world’s most respected extreme athletes and adventurers. However, GoPro failed to innovate, sticking to its core product. In fact, it’s only innovations have been in size, quality of image and connection to devices. As a result competitors have been given ample opportunity to catch up, and only recently major competitor LG released its Action Cam LTE. Using inbuilt network connectivity, this device can send content directly to the Internet. This means, with the advent of live streaming and apps such as Periscope, consumers will be able to instantly stream and upload directly from the camera. In addition, it has built-in GPS technology and motion sensors, so it can start filming and streaming when you begin your ski run and not before.
GoPro has recently announced it will branch out into drone technology. Originally it planned to release its first Drone, named Karma before the summer season in the US, but these plans have now been delayed until “towards the end of the year.” Analysts have shown little interest in GoPro’s attempt to diversify with some saying it’s an unacceptable move for a technology company that prides itself on offering consumers some of the best film technology available, to enter the drone market so late.
The real challenge however is likely to be in direct competition from smart phone manufacturers. Cat, Samsung and many others have inbuilt high-quality video and waterproof or rugged features. This combined with the convenience of not having to carry another piece of tech, has served to remove midtier consumers from the market – those people who would like a dedicated action camera but have decided against it because their phones do a similar thing. And as phone technology continues to develop, this will only get worse.
If GoPro has any intention of continuing to exist as an independent company, it will need to look back to where it began – consumers with a clear unfulfilled need, tired of breaking cameras. Innovation doesn’t always need to be something new, but it certainly needs to be something better.