Bad Karma: Unable to dethrone DJI, GoPro unceremoniously exits the drone business
posted Monday, January 8, 2018 at 11:25 AM EDT
It wasn't long ago when it felt like GoPro was the king of the mountain. In the case of their action cameras, I mean that quite literally. The brand itself became nearly synonymous with action cameras, much like people used to refer to nearly all MP3 players as "iPods." Now it is becoming increasingly likely that people will simply refer to drones as "DJIs" as the Chinese giant has added another victim to its trophy case. During its earnings report today, GoPro has announced that it is exiting the drone business.
In its report, GoPro says, "Although Karma reached the #2 market position in its price band in 2017, the product faces margin challenges in an extremely competitive aerial market. Furthermore, a hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead. These factors make the aerial market untenable and GoPro will exit the market after selling its remaining Karma inventory. GoPro will continue to provide service and support to Karma customers." The key bit here is that not only will GoPro exit the market, but they apparently reached the number two position in the market before succumbing to competitive pressures. It is quite something that a product can be simultaneously successful by numerous measures yet also be a failure. It didn't help that the Karma had recall issues early in its life, but nonetheless, people bought the product and yet it still failed.
As a brief retrospective on the GoPro Karma Drone, it was revealed in late 2016 and launched that year for $799. In November of 2016, GoPro recalled the Karma citing issues with power loss during flight. The Karma didn't fare well critically, with many reviewers finding it underwhelming against competition from DJI. The Verge notes that during 2016, GoPro lost $373 million, surely thanks in no small part to the massive research and development costs associated with developing and producing a drone.
If you want a GoPro Karma drone, now is your last chance. The Karma itself, without a camera, can be purchased for $399. A Karma with GoPro's latest HERO6 action camera is $999 after a $200 instant savings.
In similarly difficult news for GoPro, the company has announced yet another round of layoffs. This is their fourth batch of job cuts since 2016 and their employee count will soon drop below the 1,000-person mark. GoPro CEO Nicholas Woodman says that GoPro is "committed to turning our business around in 2018…We expect that going forward, our roadmap coupled with a lower operating expense model will enable GoPro to return to profitability and growth in the second half of 2018." Profitability is great for shareholders, but if it comes at the expense of jobs and revenue, it'll be something of a hollow victory.
(Via The Verge)