Watch This Milestone in Wearable Technology

U.S stocks are falling on Wednesday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES: ^DJI  ) down 0.57% and 0.6%, respectively, at 10:15 a.m. EDT. Yesterday's final revision for first-quarter U.S. GDP was downbeat, today's initial jobless claims figure for last week of 312,000 is in line with the consensus forecast ... and so it goes. (Reminder: A long-term, value-oriented investor ought not to pay much attention to short-term volatility in economic indicators.) In company-specific news, digital camera maker GoPro joins the public markets this morning.

As smartphones and tablets approach maturity in developed markets, the next growth segment for mobile device manufacturers appears to be "wearable technology." Yesterday, for example, Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) announced at its I/O conference that consumers can now order the first Android-powered smartwatches from LG and Samsung. Google has already produced a wearable device with the Google Glass smart spectacles, although they have so far garnered only a niche following among technology hipsters and enthusiasts.

However, that's not the milestone I referred to in the headline. Instead, I'm looking at GoPro, shares of which begin trading on the Nasdaq this morning after pricing at $24 yesterday. With a valuation approaching $3 billion, it's one of the largest consumer electronics floats in years. GoPro increased revenue by 87% last year to nearly $1 billion. Essentially all of that revenue comes from the sale of versatile handheld (or head-mounted) cameras that enable users -- many of them sports enthusiasts 00 to capture footage like this:

Initial public offerings, particularly in the technology sector, are rarely great bargains. As I wrote in this column on Tuesday, investors should steer clear of most IPOs: A public offering is an exercise in salesmanship during which a company takes advantage of the spotlight to put its best foot forward. At their $24 IPO offering price, GoPro's shares don't look particularly cheap, at first glance: the price is 51 times the $0.47 per share GoPro earned last year.

Furthermore, consumer electronics companies are generally poor long-term investments. The industry is brutally competitive and it is very tough to establish any sort of defensible franchise: Technology itself is rarely a differentiator (not over any significant time period, in any case) and companies are reduced to competing on price.

Interestingly, then, GoPro has chosen to market itself partly as a media company, pointing to large followings on social media websites and a massive collection of user-generated content. As the offering document explains:

We believe consumer demand for compelling content, combined with our self-capture technology and the popularity of social media, create a significant media opportunity for GoPro. GoPro programming, a combination of GoPro originally produced content and "best of" UGC, has developed a growing audience. ... In addition, we actively curate and redistribute, with permission, UGC as GoPro-branded content through the GoPro Network, which includes the GoPro Channels on Facebook, Instagram, Twitter, Virgin America, Xbox Live and YouTube.

It's not clear that this initiative will ever make a significant contribution to revenue and profit, but it nonetheless seems shrewd from a branding perspective. GoPro is in a tough business, but it appears to have established a genuine brand, which could translate into a competitive advantage. So far, wearable devices appear to have mainly niche appeal -- one of GoPro's strengths is that it understand who its customers are and has been delivering a product they want.

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Leaked: Apple's Next Smart Device
(Warning, it may shock you)
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