GoPro (NASDAQ:GPRO) seems to have hit the sales limit for action cameras. It sold 6.6 million units in 2015 and fewer each year since, ending with 4.3 million units sold last year. Efforts to expand into new markets like drones and media have failed, leaving the company with few growth opportunities in its pipeline.

One product that is performing well and could have a lot of potential is the Fusion spherical camera. Spherical cameras capture unique still and video images in a full 360 degrees, and GoPro has a large market share and technology it can leverage to retain its lead. But GoPro needs to make some bold moves to ensure domination of this potentially large camera market. 

GoPro's Fusion camera.

Image source: GoPro.

Fusion is already doing well on a relative basis

According to CEO Nick Woodman, "Our spherical camera, Fusion -- even with limited distribution -- has captured roughly 48% of the U.S. market on a dollar basis. We are proud to play a leadership role and plan to drive the category forward with future innovation." Owning 48% of any market is outstanding, and in such a new, high-potential market it's great that GoPro has had such success with a first-generation product

What's driven GoPro's success with the Fusion camera is that it's a simple camera and it integrates with GoPro's spherical editing software. But if GoPro is going to grow this product line, it's going to need to do much more with spherical cameras and software. 

GoPro needs 360 video distribution

I would argue that GoPro has the best consumer spherical camera package on the market when cost and functionality are considered. Some competitors may make a higher quality product for thousands of dollars, but Fusion's $700 price is accessible for most early adoptors. 

What's missing right now is a truly immersive place for GoPro to distribute content consumers capture on the Fusion camera. The GoPro VR Player will allow users to play spherical content on desktop computers, but to get images to a headset like an Oculus Rift or HTC Vive takes a lot of effort. 

The big gap today is video and image distribution on the Oculus Go, a device that would allow GoPro to pair an accessibly priced camera with an accessibly priced VR headset. Oculus Go would be a great playback device for Fusion content, but there isn't an easy, seamless way to get content from the Fusion camera, edit it, and then upload to a headset like Go. This is a huge gap for GoPro, and will limit Fusion's potential. 

GoPro could ride the VR wave

Hero cameras are the most identifiable products in GoPro's lineup, but there isn't much growth left in the market. Growth could be abundant in spherical images and videos, however, where GoPro Fusion already has a solid market share and clearly leads the consumer market. 

GoPro may be able to grow its business overall if it can build on the Fusion's success. But it needs to avoid problems it faced with action cameras, and make it easy to download images, edit them, and upload them to platforms like third-party apps and social media. Finding ways to get spherical content out to the world is now the biggest challenge for Facebook, but with the number of virtual reality headsets in circulation growing and prices coming down, it's a channel the company needs to figure out.