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  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
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  • Number of pages: 2

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Financial Summary

GoPro has forever changed the photography and consumer electronics industries.  Before GoPro, cameras were fragile, expensive, and complicated machines reserved for mothers, professionals, and special occasions, never amateur athletes, outdoorsmen, and especially not for people that like to use their camera underwater.  Their birth and early growth as a company and brand was astronomical and unprecedented, going from $800,000 to $3.4 million in sales in just over a year.  GoPro's name is recognized the world over, and its flagship camera can be found under Christmas trees and on the boards of professional surfers.  The brand is strong and the product is unique, but that hasn't made them immune to failure; since going public in 2014, GoPro's stock price has been steadily decreasing.  However, in 2016 GoPro took action to modernize their product line and improve the overall GoPro experience by launching cloud-connected cameras, smartphone video editing software, and a new wireless drone.  GoPro also made improvements in their operations and marketing, by investing in research and development, marketing to existing GoPro customers, and expanding overseas.

In response to declining sales in 2015, GoPro increased its research and development expenses by roughly 25%.  Their current lineup of five camera models, with pricing ranging from $150 to $700, allows them to cater to young amateurs and what they call “pro-sumers” (professional consumers).  This is enough to satisfy the average consumer, but as was evident in declining sales, existing GoPro owners don't often buy another GoPro.  Their goal for 2016 was to enhance the GoPro experience by integrating it into the smartphone experience; the smartphone and its now highly capable cameras being a threat to the GoPro camera.  By developing and launching QUIKstories, an iPhone app that automatically and intelligently edits the user's GoPro footage into shareable videos.  To further integrate the GoPro into consumers existing tech ecosystems to boost sales, they launched two new cameras — the HERO6 Black and HERO5 Session — with cloud-connected capabilities.  GoPro realized that now with highly capable smartphones, the consumer expects more from a device, and to compete with these smartphones GoPro needed to make their cameras and software as smartphone friendly as possible.  Additionally, GoPro added a new category: drone.  In late 2016 they launched what they call “Karma” — a remote controlled flying drone that is compatible with GoPro cameras to film and photograph aerially.  For $800 dollars it isn't the most accessible piece of tech, but its birth was founded on the belief that a new category would boost sales by selling to existing GoPro owners and new customer acquisition.  

Unfortunately, however, GoPro sold 28% less units in 2016 than they did in 2016 and revenue decreased by 23%.  Due to its hefty research and development spending, operating expenses increased by about 25%, and the company reported a net loss of $419,003,000.  The percentage of revenue generated from American sales has been steadily decreasing for the past three years, whereas EMEA (Europe, Middle East, and Africa) and APAC (Asia and Pacific) have been steadily increasing to now nearly half of all GoPro sales.  GoPro invested in new distribution channels overseas starting in 2014 and are now beginning to reap the profits, as foreign consumers are buying more tech than domestic consumers.  In an effort to further reduce expenses they also decreased their workforce by 15%, all while increasing their marketing and advertising budgets.  

Since going public in 2014, GoPro's stock has been steadily declining in price.  It hit its maximum price on October 3, 2014 at $86.97 but as of December 8, 2017 its selling at just above $8.  GoPro is in an innovative and unique company, but having operated at a loss for the past year, with decreasing incomes since 2014, it's possible that GoPro's future isn't so bright after all.  One should purchase stock in GoPro as of right now, because its possible the steps the company has taken this last year to make its products more relevant, diverse, and integrated into the modern tech ecosystem could boost its value in the future.  

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