CNN Money:- GoPro has crashed. Will drones rescue it?


By Matt Egan

After going public in June 2014 at $24 a share, enormous enthusiasm for the powerful GoPro(GPRO, Tech30) brand sent its shares skyrocketing to nearly $100.

But valuations got out of whack with reality. The wearable camera maker’s shares crashed back to earth this year, plunging below $31 this week — depths unseen since its initial public offering.

The breathtaking decline — which has accelerated in recent months — has been fueled by concerns that GoPro and its extreme sports following is just a fad subject to competitive threats.

To answer those fears and fuel its shares in the short term, GoPro will need to churn out more hot products. Longer term, the key for GoPro could be its ability to defend itself from drone makers encroaching on its camera turf.

GoPro is flying into drone market

GoPro isn’t asleep at the wheel though. GoPro CEO Nick Woodman said at the TechCrunch conference in San Francisco this week that the company is planning to launch a consumer drone in the first half of next year

Drones “show us ourselves and our world from that angel perspective, which I think is awe-inspiring,” Woodman said.

The drone market could be huge for GoPro. Pachter, the Wedbush analyst, believes that easily 1% of current GoPro customers could purchase a drone. That would translate to roughly $100 million in sales if the drones cost around $1,000 apiece.

Enderle said GoPro should have used some of its cash to buy a drone maker because starting its own product can be risky and expensive.

It’s very important GoPro is able to execute here because a market flip is dangerous, especially to companies heavily invested in a single category.

“The market looks like it’s ready to pivot — and GoPro isn’t there yet,” said Enderle.