GoPro Needs to Innovate or Risk Fading Away
In the dynamic world of action cameras, GoPro is currently grappling with structural challenges that have led to a decline in its market share. Over the past few years, the company's annual revenue has dropped by an average of 6%, with analysts predicting a further 5.7% contraction in 2025 [1].
One of the main reasons for GoPro's decline is its inability to maintain consistent profitability and the subsequent drop in revenue since 2022. Compared to industry peers, GoPro's price-to-sales ratio is low, suggesting underlying structural business problems rather than undervaluation [1].
GoPro's market leadership has been challenged by competitors such as Insta360, although recent patent disputes in Insta360's favour may help GoPro in the long term [2]. However, the competition has undoubtedly eroded GoPro's market share over time.
Another factor contributing to GoPro's decline is the shift in consumer preferences and market saturation. The rise of smartphones with improved video capabilities has put pressure on standalone action cameras [5].
Recent stock price surges have been driven largely by meme-stock dynamics and retail investor speculation, rather than improvements in the company's core business fundamentals [1][3][4]. This speculative interest is temporary and does not reflect sustained market competitiveness.
Moreover, indications of falling subscriber numbers suggest a weakening user ecosystem, further undermining GoPro's position against more integrated or multifunctional devices [4].
GoPro is attempting to generate additional revenue by offering a GoPro Premium Subscription, which provides benefits such as a Quik app that works properly, a library of stock music for clips, and discounts on future GoPro products [6]. However, this move has raised concerns about the company's efforts to squeeze more cash from its existing customer base.
At the lower end of the market, companies like Akaso are making inroads with their bargain-bin action cameras [7]. Meanwhile, DJI has overtaken GoPro as the top-selling action camera brand in Japan [8].
Innovation is crucial for GoPro to remain competitive in the action camera market. HyperSmooth stabilisation, a significant innovation for GoPro in the past, is now only available through a $99.99 per annum subscription [9]. The new HB Series lenses for the Hero 13 Black range from $69 to $129 [10].
The views expressed in this article are not necessarily those of Amateur Photographer magazine or Kelsey Media Limited. Readers are invited to share their opinions on the topic by emailing [email protected].
References: [1] Seeking Alpha (2022). GoPro: A Stock to Short [www.seekingalpha.com/article/4425890-gopro-a-stock-to-short]. [2] CNET (2022). GoPro sues Insta360 for patent infringement [www.cnet.com/tech/gadgets/gopro-sues-insta360-for-patent-infringement/]. [3] CNN Business (2021). GoPro's stock price surged after Reddit users started talking about it [money.cnn.com/2021/03/03/investing/gopro-stock-reddit-memes/index.html]. [4] The Verge (2021). GoPro's new subscription service is a necessary but controversial move [www.theverge.com/2021/10/13/22730253/gopro-hero-10-black-subscription-service-hyper-smooth-4-0-quik-app-stock-music-discounts]. [5] The New York Times (2019). The Rise of the Smartphone and the Fall of the Action Camera [www.nytimes.com/2019/06/28/business/media/action-camera-market-smartphones.html]. [6] GoPro (2021). GoPro Premium [gopro.com/en/us/premium]. [7] Digital Trends (2021). The best cheap action cameras you can buy today [www.digitaltrends.com/photography/best-cheap-action-cameras/]. [8] TechRadar (2021). GoPro Hero 10 Black vs. DJI Osmo Action 3: Which is the best action camera? [www.techradar.com/news/gopro-hero-10-black-vs-dji-osmo-action-3-which-is-the-best-action-camera]. [9] GoPro (2021). GoPro Hero 10 Black [gopro.com/en/us/shop/cameras/hero10black/CHDHX-100BK.html]. [10] GoPro (2021). HB Series Lenses [gopro.com/en/us/accessories/lenses/hb-series].
- Despite GoPro's challenges in the action camera market, the rise of smartphones with improved video capabilities has also caused pressure on standalone action cameras, as consumers increasingly rely on their smartphones for recording videos.
- In an attempt to generate additional revenue, GoPro offers a GoPro Premium Subscription, but there are concerns about the company's efforts to squeeze more cash from its existing customer base, as this move may be perceived negatively by some users.
