Last December, GoPro announced its first ever drone. Called the Karma, this highly-anticipated device was set to be released sometime in the first half of 2016. But things don’t always go as planned. To the chagrin of many film makers and extreme sports enthusiasts, the Karma’s release date has been pushed back until winter, the company said in an announcement last week. Even worse, GoPro is undergoing some financial distress, reporting a shift from a $22 million profit to a $121 million loss and a revenue drop of nearly 50 percent in its first quarter earnings compared to that of early 2015.
Not much is known about the Karma, but many considered it an exciting opportunity for the financially struggling action camera company. Competition and poor sales saw GoPro’s stock prices plummet about 79 percent over 2015, and a lackluster product release (the GoPro Hero4 Session) forced the company to decrease the price of its new Hero 4 camera by half. After a 31 percent drop in 2015’s Q4 revenue, it discontinued many of its cameras and trimmed its product line down to just three devices by April 2016. This move cost GoPro $57 million and 7 percent of its stock price.
But financial issues haven’t kept GoPro from developing their software. Earlier this year the company acquired, repackaged, and relaunched two video editing startups to assist filmmakers with the inconvenience of video editing. The first app, called Quik, allows for quick editing by automatically analyzing footage to identify the best scenes before adding transitions and effects. The second one, Splice, is a more manual editor that isn’t as fast as Quik, but gives film editors more control over the final cut.
The Karma may have helped GoPro rise above these consecutive losses by branching out into the burgeoning realm of aerial drone videography. And though the device is delayed, it still might help GoPro recover by arriving on the market during a lucrative season. Sales typically increase during the winter holidays, when the Karma is now scheduled to be released, so the decision to delay the device may well be calculated. In fact, GoPro admits in its report, “…while we had to make the difficult decision to delay our drone, Karma, the upside is that Karma’s launch should now benefit from the holidays.” However, that leaves at least six months in which GoPro will need to raise its earnings in other ways.