Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) recently introduced Clips, a tiny camera which continuously captures content without any user intervention. The device -- which can be clipped to clothing, held, or set down -- uses AI to recognize the faces which are important to you and automatically starts taking pictures and recording short videos.

At first glance, this $249 device seemed like a potential rival for GoPro's (NASDAQ:GPRO) action cameras. As a result, GoPro shares fell 7% following Google's announcement on Oct. 5. But if we take a closer look at Clips, we'll notice two important things -- that it targets a different market than GoPro, and its "creepiness" factor could alienate a lot of customers.

Google's Clips camera.

Image source: Google.

What Google thinks will happen

Unlike GoPro, which mainly targets outdoor enthusiasts, Google is targeting parents and pet owners with Clips. It makes sense on paper, since the unpredictable behavior of children and pets can be hard to capture with point and shoot cameras.

Google also learned a few lessons from the failure of Google Glass, which initially flopped due to privacy concerns about its camera and it awkward appearance. Instead of automatically linking Clips to Google Photos, which could spark major privacy concerns, the device connects to a stand-alone app. The captured content, which is stored on the device, can only be manually shared to Google Photos and social networks.

Therefore, Clips isn't a social play against Facebook or Snap's (NYSE:SNAP) Snapchat. It's already doing that with "Stamp", which clones Snapchat's popular media tab. Instead, Clips is likely an attempt to sharpen Google's computer vision and AI capabilities, which are becoming increasingly important in the age of drones and driverless vehicles.

But Google can't shake its creepiness factor

Unfortunately, it's easy to spot the potential problems that could arise. If a parent sets up Clips in a park to track their kids, it could be creepily intrusive if it automatically takes pictures of other children. If mainstream users clip on the cameras while walking around the city or dining in restaurants, it will raise the same privacy issues that sank Glass.

It could be argued that using Clips wouldn't be that different from wearing a GoPro camera or Snap's Spectacles. But there's a huge difference -- GoPro cameras display a red LED while recording, and the Spectacles light up while taking a picture. Without these cues, wearable cameras become creepy and invasive.

GoPro faces headwinds, but Clips isn't one of them

Privacy issues aside, GoPro's cameras and Google Clips are very different products. GoPro cameras record full-length, high quality videos with sound. Clips' "videos" lack audio and only last seven seconds -- which wouldn't appeal to GoPro's core market.

GoPro bears might argue that Clips could make it tougher for GoPro to reach mainstream users. Yet Clips will face the exact same dilemma as GoPro in that market -- most users don't want to carry around a stand-alone camera when a smartphone works fine for most situations.

Instead, GoPro should beware of rivals like TomTom, which can capture video highlights based on a user's movements and acceleration with its Bandit camera; Samsung, which launched a 360-degree camera long before it introduced Fusion; and DJI Innovations, which remains well ahead of GoPro in the drone market.

The Foolish bottom line

Google often throws lots of ideas at the wall to see what sticks, so I think that Clips isn't really a serious effort to challenge GoPro in the action camera market. Instead, it's a test to see if it can push the boundaries of "lifelogging" without becoming creepy, and to train its AI to recognize more images. I'm still not a fan of GoPro, but I think it would be foolish for investors to sell the stock on Google's announcement.