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Will GoPro’s Camera TradeUp Program Impact 2Q17 Revenue?

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GoPro’s first camera upgrade program

In April 2017, GoPro (GPRO) announced its TradeUp Program. Existing GoPro users in the United States (SPY) are eligible to purchase the HERO5 Black camera at a discount of $100 and the HERO5 Session camera at a discount of $50 by trading in any of their GoPro HERO cameras.

GoPro is retailing the HERO5 Black camera for $399.99 and the HERO5 Session camera for $299.99. These two cameras offer services such as a cloud connection with the GoPro Plus as well as connections to the Capture and Quik applications. The HERO5 line of cameras has additional features such as hands-free voice control, enhanced image stabilization, extended battery life, and simplified controls.

These cameras are also compatible with GoPro’s Karma drone that was launched a few months ago. In 1Q17, GoPro generated approximately 40.0% of its revenue from the United States and has tie-ups with retailers such as Best Buy (BBY) and Amazon (AMZN).

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Revenue growth of more than 20% in 2Q17

As we’ve already seen, analysts expect GoPro’s revenue to rise 22.2% in 2Q17 to $269.7 million. In 2Q16, the company shipped 759,000 cameras and generated revenue of $220.8 million. In 1Q17, its average selling price (or ASP) was $295.40. If the ASP remains the same in 2Q17, it will sell more than 900,000 cameras in the quarter ended June 2017. GoPro expects the HERO5 line of products and the Karma drone to drive revenue in 2Q17. It also hopes the upgrade program will drive incremental revenue in 2Q17.

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