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Is GoPro Banking on Karma Again to Drive Future Revenue?

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Dec. 4 2020, Updated 10:53 a.m. ET

Resuming sales of Karma

On January 4, 2017, GoPro (GPRO) stated that it will resume sales of its Karma drone. Karma was launched last year and the drone has helped GoPro to diversify beyond its action camera product line. GoPro announced refunds to customers on the drones instead of replacements. GoPro clarified that the power losses affecting drones were due to a mechanical issue with the battery. GoPro is expected to complete the tests for Karma and re-launch it in February 2017.

Analysts expect GoPro’s revenue to rise 35.2% YoY (year-over-year) to $590.19 million in 4Q16 and 51.6% YoY to $278.27 million in 1Q17.

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HERO5 Black and HERO5 Session

GoPro (GPRO) launched its HERO5 Black and HERO5 Session in September 2016. HERO5 Black is currently available for purchase at a price of $399.99, whereas the HERO5 Session is priced at $299. One of the important aspects of the HERO5 line of cameras is the auto-upload feature for photos and videos to GoPro Plus. GoPro Plus is a cloud-based subscription service that lets users easily access, share, and edit GoPro content anywhere with a smartphone or a personal computer.

GoPro is optimistic about its HERO5 product line. Chief executive officer Nicholas Woodman stated that all GoPro products are now waterproof. The HERO5 Black and HERO5 Session are improved products eliminating several previous pain points. Both cameras come with the feature of voice control while HERO5 Black also has a touch display.

Production issues in 3Q16 negatively impacted volumes of HERO5 Black and are expected to impact revenues in 4Q16 as well. Channel inventory of GoPro’s HERO4 fell 70% quarter-over-quarter in 3Q16. GoPro, however, stated that it’s aggressively ramping up distribution of the HERO5 around the world. GoPro can also rely on its strong retail network, which includes Walmart (WMT) and Best Buy (BBY), to drive HERO5 sales this holiday season.

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