Image source: GoPro.

Action-camera maker GoPro (NASDAQ:GPRO) announced official fourth-quarter results yesterday. This comes after the company had pre-announced preliminary figures in early January, warning investors that revenue would be right around $435 million and far shy of consensus estimates.

Indeed, fourth-quarter sales came in at $436.6 million, down 31% year over year. Operating expenses jumped quite a bit, leading to an operating loss of $41.3 million. GoPro posted an adjusted net loss of $0.08 per share. But wait, let's back up a bit. I should stop referring to GoPro as an "action-camera maker." Or should I?

An action-camera maker by any other name...
On the conference call, a Street analyst asked for some clarification around the implied decline in 2016 unit volumes. Full-year 2016 guidance calls for revenue in the range of $1.35 billion to $1.5 billion, compared to the $1.6 billion that GoPro just posted for full-year 2015.

CEO Nick Woodman said that the company does not believe that its total addressable market is limited nor saturated. He also suggested that investors consider GoPro from a broader positioning:

We believe that, because GoPro enables consumers to self-capture themselves in ways that they cannot with any other camera -- one way to think about GoPro, we're narrowly described as being an action, quote-unquote, camera Company. I'd prefer -- we would all prefer that we think of it more as GoPro as the world's leading activity-capture company. Action implies something risky and dangerous that you're doing.

It may seem like a minor semantic distinction, but it's a meaningful one. The "action-camera" market is proving to be quite a niche. Nearly all of GoPro's viral videos include "something risky and dangerous" -- which is why they go viral in the first place. But only professional athletes or extreme sports enthusiasts are willing to pay $400 to $500 for a high-end wearable action camera. The average consumer doesn't need a HERO4 Silver to post pictures of their lunch to Instagram.

Woodman continued, saying that the "majority" of customers use their GoPro devices to film "everyday activities." This is why Woodman and the rest of GoPro's management team now want to identify the company as an "activity-capture company." But in order to truly appeal to the mainstream consumer, GoPro needs to release a compelling mainstream hardware device, which it has yet to do. still an action-camera maker
GoPro wants to provide a stand-alone device for casual video capture, ideally supplementing the smartphone. The irony here is that a similar category of devices (point-and-shoot cameras) was already killed by smartphones. A categorical comeback for these types of devices is simply not realistic, at least not for the average consumer. Even for the cheapest $130 HERO.

Sure, the company is working on its Karma drone and a 360-degree camera rig to capture VR content, while acknowledging the need to release better software that makes it easier to manage and share their video content. But for now, considering the fact that all of GoPro's revenue comes from action cameras, I'm going to stick with calling it an "action-camera maker."

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.