GoPro Is Destined to Fail

It seems like GoPro (GPRO) bulls are clutching at straws as the stock rallied strongly last week. Recently, Nintendo’s newly-launched AR-based game Pokémon Go has taken the world by storm. GoPro’s shares surged 13 percent apparently on the hopes that Pokémon Go would trigger interest in the AR market. However, as a matter of fact, the company’s 360 degree VR rigs have completely nothing to do with the depth sensing cameras that are used for augmented reality applications.

GoPro is highly dependent on the drones, and recently FAA declared some massively restrictive rules regarding drones.
According to FAA, drones may not weigh over 55 pounds and always have to stay in the sight of pilot. Most significantly, it is mandatory that a pilot should have a remote pilot certificate and must be age 16 or higher. Due to these rules, massive retailers, who were thinking to use drones for delivery purposes, face a serious problem.

On the other hand, the company has not publicized much about its upcoming Hero 5 and the Karma. However, considering the company's existing condition, it is necessary that both the products must propose stunning features at viable prices to win back its lost reputation and customers.

Recently, Yi Technology introduced a Yi 4K Action Camera 2, which uses the identical SoC manufactured by Ambarella and used by Hero 4 Black. Not only this, Yi Technology additionally added a bigger battery and an LCD screen, and is priced at just $250 which is exactly half the price of Hero 4. Apart from these, Xiaomi also launched its new 4K drone with extraordinary features and is priced at $450, $50 less compared to Hero 4 Black.

One of the most significant things which GoPro has taken lightly is the pricing, as the products of the company are comparatively priced higher. Nowadays, many small companies are entering the drone market with innovative ideas and they price their products cheaper than GoPro. GoPro really needs to work on its pricing strategy as the company will likely struggle with the growing competition.


GoPro has been a terrible stock for investors as it has always surprised with its ability to continue heading lower. It seems like GoPro’s commercial drone dream is dead, and the company will likely get outfoxed in the consumer drone market. The recent rally is unjustified and GoPro looks like a definite sell heading into the earnings season.
Published on Jul 21, 2016
By Prudent Investor

Copyrighted 2020. Content published with author's permission.

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