GoPro makes swift exit from drone market, confirms job cuts following weak Karma sales

Posted:
in General Discussion edited January 8
In a Monday earnings report, GoPro announced plans to end drone sales after it sells out of remaining Karma models, and engage in cost-cutting measures to right itself financially -- including laying off hundreds of people.




Its workforce will shrink from 1,254 to "fewer than 1,000" worldwide, the company said. CEO Nicholas Woodman, meanwhile, will see his 2018 cash compensation shrink to $1.

Fourth-quarter revenue was $340 million, marking the company's worst holiday season since its 2014 IPO, especially since it had already been predicting a low $470 million. To spur demand for its iPhone-compatible Hero action cameras, it dropped the price of the Hero5 Black on Dec. 10, and the Hero6 Black on Jan. 7. The latter is now $399 instead of its original $499.

GoPro should return to profitability in the second half of 2018, Woodman said in a statement. Word of layoffs first emerged last week.

The company had been counting on the Karma to boost business and fend off competition. The drone was launched in late 2016, but was quickly recalled after some units lost power mid-flight. It went back on sale in February 2017, but GoPro was never able to catch up with the likes of China's DJI.

Comments

  • Reply 1 of 10
    tzm41tzm41 Posts: 66member
    They have not invested in drones D&D for long enough to compete with DJI and the likes anyways...
  • Reply 2 of 10
    I suppose the best outcome for them is to get bought by a larger tech company. I don't see how they grow a camera business at this point. Aren't they more or less servicing a niche? And that's fine, especially if they hadn't gone public. Going public isn't always the best avenue if you actually care about and want to grow a company. But if they were beholden to the VC types, then it's not a decision made for the good of the company or its customers. It's a bottomline decision. They want returns on their investments.
  • Reply 3 of 10
    jumejume Posts: 145member
    I suppose the best outcome for them is to get bought by a larger tech company. I don't see how they grow a camera business at this point. Aren't they more or less servicing a niche? And that's fine, especially if they hadn't gone public. Going public isn't always the best avenue if you actually care about and want to grow a company. But if they were beholden to the VC types, then it's not a decision made for the good of the company or its customers. It's a bottomline decision. They want returns on their investments.
    That's exactly whats wrong with this world. Grow grow and grow more! Whats wrong by being small, niche and the best in what you do? Even if it's just a fucking sport camera and the market size is just 300m. We already outgrown ourselves just about everywhere, I think it's time we start shrinking.
    edited January 8 StrangeDaystokyojimuwatto_cobra1983
  • Reply 4 of 10
    sflocalsflocal Posts: 4,097member
    jume said:
    I suppose the best outcome for them is to get bought by a larger tech company. I don't see how they grow a camera business at this point. Aren't they more or less servicing a niche? And that's fine, especially if they hadn't gone public. Going public isn't always the best avenue if you actually care about and want to grow a company. But if they were beholden to the VC types, then it's not a decision made for the good of the company or its customers. It's a bottomline decision. They want returns on their investments.
    That's exactly whats wrong with this world. Grow grow and grow more! Whats wrong by being small, niche and the best in what you do? Even if it's just a fucking sport camera and the market size is just 300m. We already outgrown ourselves just about everywhere, I think it's time we start shrinking.
    It will never happen in the capitalistic society we all live in.  Public companies are beholden to it shareholders, and those shareholders always want (demand) increasing stock prices and/or dividends.  Shareholders couldn't care any less about being in a niche area and happy with sustainable returns.

    No, Wall Street might as well be re-branded as the "Wall Street Casino".  Everyone wants their big payday, companies be damned.
  • Reply 5 of 10
    jimh2jimh2 Posts: 30member
    I never understand how sports cameras could be a huge market that only one company would dominate. They definitely should have kept partnering with DJI. When they went public there was no time for screwups.
    1983
  • Reply 6 of 10
    gatorguygatorguy Posts: 18,605member
    The latest is that GoPro is looking for a buyer for the entire company. 

    Edit for link to news:
    https://www.cnbc.com/2018/01/08/gopro-ceo-nick-woodman-says-the-company-would-entertain-a-sale.html
    edited January 8
  • Reply 7 of 10
    SpamSandwichSpamSandwich Posts: 29,266member
    This is the problem when you go to market with a "bet the company" strategy.
  • Reply 8 of 10
    airnerdairnerd Posts: 514member
    jume said:
    I suppose the best outcome for them is to get bought by a larger tech company. I don't see how they grow a camera business at this point. Aren't they more or less servicing a niche? And that's fine, especially if they hadn't gone public. Going public isn't always the best avenue if you actually care about and want to grow a company. But if they were beholden to the VC types, then it's not a decision made for the good of the company or its customers. It's a bottomline decision. They want returns on their investments.
    That's exactly whats wrong with this world. Grow grow and grow more! Whats wrong by being small, niche and the best in what you do? Even if it's just a fucking sport camera and the market size is just 300m. We already outgrown ourselves just about everywhere, I think it's time we start shrinking.
    The only problem I see with being small and the best at what you do is that there will be many copycats that may be able to get close to your quality but multiples less in market price.  
    watto_cobra
  • Reply 9 of 10
    boltsfan17boltsfan17 Posts: 1,899member
    Not surprising really. The Karma drone is a pretty awful drone. The stabilization isn't very good and the range of the drone is much shorter than its competitors. It's was pretty stupid for GoPro to enter the drone market and not offer anything the competitors are doing like the ability to follow you or have sensors to avoid obstacles. Plus, it didn't look good when they had to recall all the drones after release for malfunctioning and falling out of the sky. 
  • Reply 10 of 10
    19831983 Posts: 1,032member
    RIP GoPro...I think they’re going the same way as that company (I forget they’re name) who specialized in simple consumer video cameras (not sport-cams like GoPro) who were then bought up by a big corporation which shortly afterwards ceased production of said cameras...what were they called?
    edited January 9
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