GoPro's (NASDAQ:GPRO) success in the action camera market hasn't happened in a vacuum, and it has certainly been noticed by competitors. And the company's natural product line extensions are entering markets that competitors have already invested in heavily. 

The crowded market shows: In early 2017, GoPro has been losing out to the competition in three areas for a variety of reasons. That doesn't mean these are lost markets, just that the company might be fighting an uphill battle in the years ahead. 

GoPro 360 image of snowboarder on a mountain.

Image source: Getty Images.

Smartphones are just too easy

When GoPro first launched, it made taking pictures or video easy with a camera that fit in your pocket. Better yet, you could take underwater images, something that was very difficult to do at the time. 

Today, the cameras on smartphones that most people have in their pockets are in some ways better than GoPro cameras, many are waterproof, and it's certainly easier to edit and share images from within a smartphone. 

Smartphones are a source of competition that aren't going away, and companies know that cameras are a big feature customers look for. It's something GoPro is going to have to live with, and it'll need to design products that have attractive enough features that are still a draw for customers. 

The drone just isn't 

Karma Drone didn't just have problems flying when it was first launched, it fell behind competitors almost immediately. DJI is the big dog in drones, and it released its Mavic drone just days after Karma -- and its drone was smaller, had more features, and flew more reliably. There may not be a large number of competitors Karma is losing to, but being well behind DJI isn't a place any company wants to be. 

What shouldn't be lost on investors is that Karma is GoPro's first crack at a drone. And it's no small feat just to get a product to market given the bankruptcies that have already taken place. What GoPro needs to do from here is improve the Karma and offer features that make the drone competitive with DJI while keeping it attractive for more novice users who may see GoPro as a more versatile option than a hardcore drone. GoPro is losing the drone war today, but it could still have a place in the market in the future. 

Making VR easy

GoPro has taken an early step to get into 360 video and virtual reality, but it's still hanging onto a premium price point for its Odyssey ($15,000) and Omni ($5,000) products. Those prices are now being blown away by competitors.

Samsung Gear 360 VR is $361, Kodak's Pix Pro SP360 is $449, and LG 360 Cam is $199, just to name a few other products that are out there. The Samsung Gear 360 is an easy to use ball design with two cameras that captures images or video on mounts that look similar to GoPro's. Kodak's Pix Pro SP 360 is an entry level product with the Orbit 360 4K 360 VR camera coming soon.

GoPro has a better name in action cameras and could build a large customer base of 360 and VR cameras, but it doesn't have a compelling, reasonably priced product yet. As a result, it's losing ground to competitors. 

Beyond keeping Karma flying, the 360 and VR camera markets may be GoPro's most important in 2017. This is the next generation market beyond action cameras, and would be a product that smartphones would have a hard time competing with directly. If GoPro can get this product line right it would be a big win, but right now it's losing to competitors, and that's a missed opportunity for GoPro. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.