We know that the drone market is very competitive — so competitive, in fact, that GoPro has announced that they will no longer be in the drone business. GoPro will also be laying off hundreds workers and lowering CEO Nicholas Woodman’s salary to just $1.
GoPro revealed in its earning reports for last year’s fourth quarter that GoPro’s $799 Karma drone will be GoPro’s last. The Karma drone has had a pretty rocky life themselves, being revealed in September 2016, but just two months later being recalled due to an issue involving a faulty battery latch that caused a few of them to lose power in mid flight. Karma was later released in Spring 2017 with a fixed latch, but there’s been a general consensus with reviewers that the Karma drone didn’t stack up to other drones on the market from companies like DJI.
Though GoPro’s profits were slightly up in 2017 compared to 2016 (having lost $373 million that year) and desite Karma reaching “the #2 market position in its price band in 2017,” according to GoPro, the company cites that “the [Karma] faces margin challenges in an extremely competitive aerial market.”
GoPro also accuses the new regulations being introduced in Europe and the US of reducing "the total addressable market in the years ahead.”
“These factors make the aerial market untenable and GoPro will exit the market after selling its remaining Karma inventory,” said the firm in a statement. “GoPro will continue to provide service and support to Karma customers.”
Now, GoPro’s decision isn’t entirely unexpected. Last week, it was announced that GoPro was laying 200-300 employees in the drone divison, the fourth sweep of layoffs since 2016, leaving the company with less than 1,000 employees.
GoPro’s revenue for last year’s fourth quarter is also pretty disappointing to the company, which they revealed will weigh out to be about $340 million, landing 2017 as GoPro’s worst holiday season since they became public in 2014. The turnout is even lower than GoPro’s $470 million prediction for the 2017 holiday season.
In response, GoPro is lowering the HERO6 Black’s price from $499 to $399, hoping to boost its sales.
CEO Nicholas Woodman has said that GoPro is “committed to turning our business around in 2018.” Woodman went on to say that the company’s new hardware and software roadmap, with lower operating costs, will allow GoPro to return to “profitability and growth in the second half of 2018.”
Whether or not GoPro will actually be able to grow their future revenue to where they want it is uncertain. But one thing that is definitely certain is that you won’t be seeing any drone from GoPro as part of that future.