Should Apple (NASDAQ:AAPL) buy GoPro (NASDAQ:GPRO)? Analysts at Northland Capital Markets certainly think so, stating that Apple could acquire the action camera maker to diversify its product line and expand its digital ecosystem.

The deal would closely resemble Apple's $3 billion acquisition of Beats Electronics last year. Just as GoPro sells its action cams at premium prices, Beats sells its headphones and speakers at higher prices than its rivals. Just as GoPro is expanding its media ecosystem with the GoPro Channel, Beats expanded its brand with its Beats Music streaming service. And just as Apple carried Beats products at Apple Stores prior to the acquisition, Apple sells GoPro cameras in its brick-and-mortar and online stores.

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GoPro and Beats have a lot in common. Source: Apple Store.

With a market cap of $4.4 billion, GoPro would eclipse Beats as Apple's largest acquisition in history, but it would be pocket change for Apple, which finished last quarter with over $200 billion in cash. In my opinion, an Apple buyout might occur for three big reasons.

1. A natural extension of phones and watches
As I discussed in a previous article, smartphones won't ever displace action cams, because the two products are aimed at different markets. Apple customers are unlikely to strap their precious and fragile iPhones to motorcycle helmets and surfboards, so a market for durable and compact GoPro cameras will always exist. That's why HTC and Sony launched their own action cams instead of installing wide-angle lenses in their phones.

Apple showcased a GoPro app for the Apple Watch at its special event in early September. The app acts as a remote viewfinder and control for GoPro cameras, which makes it easier to use screenless cameras like the HERO4 Session. The app complements GoPro's standard iOS and Android apps, which let users control the cameras from phones and tablets. These apps will also likely control GoPro's drones when they launch next year.

Since GoPro's camera feels like a natural extension of the iPhone and Apple Watch, it would be reasonable for Apple to buy GoPro to diversify its top line beyond iPhones and iPads. iPhone sales accounted for over 60% of its top line last quarter, while sales of iPads have fallen for six consecutive quarters.

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The GoPro app. Source: GoPro.

2. Ecosystem and cloud growth
GoPro's revenue is expected to grow about 20% annually this year to $2.3 billion, which would represent just 1% of Apple's projected 2015 sales of $233 billion. But we should remember that Apple didn't acquire Beats for its hardware revenue. In 2013, Beats only generated around $1.4 billion in revenues, mostly from sales of headphones and speakers, according to Fast Company. Instead, Apple likely acquired Beats to integrate its streaming service into Apple Music in response to the rising popularity of streaming apps and the decline of digital music downloads.

GoPro's ecosystem is built on its video channels, which have a massive social media following. Last quarter, its YouTube channel's subscriber base grew 40% annually to 3.1 million. Its Facebook (NASDAQ:FB) fan base grew 16% to 8.8 million. GoPro was also the fourth most engaged brand on Instagram, with 5.8 million subscribers -- a 140% jump from a year earlier. The GoPro Channel can also be viewed on Roku devices, Xbox consoles, Virgin America flights, and other networks. Although the GoPro channel is generally known for user-submitted and professional videos that double as viral ads for its cameras, the company is beefing up the network with VR films and original content. Those creative assets could be useful if Apple moves ahead with its rumored plans to produce original programming.

To enable users to back up and share content more quickly, GoPro is developing a cloud platform. If Apple buys GoPro, it can simply integrate that platform into iCloud and keep it out of the hands of rival tech companies with expanding cloud ecosystems.

3. GoPro won't be on sale for long
GoPro stock has plunged more than 40% over the past month on the illogical assumption that image processor supplier Ambarella's (NASDAQ:AMBA) conservative outlook for the rest of the year represents a slowdown for the entire action camera market. As a result, GoPro stock now trades at 16 times forward earnings -- a steep discount for a company that respectively grew its revenue and earnings by 72% and 277% annually last quarter.

If Apple pays $6 billion for GoPro -- which would represent an acquisition premium of 36% from current prices -- it would get a business that generates over $2 billion in annual revenues, devices that complement its phones and watches, and an ecosystem that grows its user base by double and triple digits every quarter. Adding GoPro cameras to its product lineup also wouldn't hurt Apple's margins, since GoPro's gross margin (46.4% last quarter) is actually slightly higher than Apple's (39.7%).

The key takeaway
Apple is clearly intrigued by action cams -- that's why it filed a patent for one earlier this year. But instead of developing and marketing its own action cam, it makes much more sense to simply buy GoPro's established brand and digital ecosystem for a few billion dollars.

Leo Sun owns shares of GoPro. The Motley Fool owns and recommends Ambarella, Apple, Facebook, and GoPro. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.