GoPro recalled its first drone, the Karma, about 16 days after launch in November last year. Now GoPro says it will be re-launching the drone this year, though it doesn’t have a specific date to share yet.
For GoPro, the launch can’t come soon enough. The company said it would cut 15 percent of its workforce in a restructuring in November last year, and its third-quarter earnings report was nothing short of very bad. In the past year, the stock has been absolutely crushed, as major questions have arisen as to whether people basically need to buy new GoPro cameras.
The company said at CES that it is completing its testing and will have more details on the re-launch in early February. The company recalled the drone due to a small number of instances of power loss, which were related to security of the drone’s battery. The whole “this year” is super vague, but it’s kind of to be expected for a company that’s going through a lot of turmoil as it tries to figure out what it looks like in 2017.
The company is going to be under intense scrutiny when it reports its fourth-quarter earnings. Much like Fitbit, the overall market overhead for a product like GoPro may end up much smaller than what investors have come to expect, and any new innovation may be too little and too late for those companies. As the stock continues to tumble, companies like Fitbit and GoPro become increasingly attractive as either acquisitions or activist investors that will try to agitate change or a sale.
The holiday season is critical for those companies. For GoPro, it was basically a disaster that it had to recall the drone just before the holidays. The holiday quarter typically drives much more revenue than any other quarter in the year for a company like GoPro (or Apple). Failing to get the Karma out means that GoPro has to watch the rest of the world activate drones from other companies and hope it can last until the next holiday season.
Whether it turns out that the drone ends up being a flop as it is entering the market so late remains to be seen. As it stands, GoPro is going up against the likes of DJI, which has firmly established itself. Having to recall and re-work the drone certainly doesn’t help (you wouldn’t want a drone falling on your head after power loss, after all).