Please ensure Javascript is enabled for purposes of website accessibility

GoPro Finally Starting to "Get It"

By Travis Hoium - Apr 18, 2016 at 3:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Two acquisitions and a new developer program show GoPro starting to understand its place in the market.

Hero 4 Session, a product that disappointed in 2015, but could show the form factor of the future. Image source: GoPro.

Prevailing wisdom on the stock market and with many consumers today is that GoPro's (GPRO 4.64%) days as a groundbreaking company are over. These days, everyone has a phone in their pocket, so who needs another camera? Especially one that makes it harder, not easier, to share photos with friends.

If you're used to taking snapshots at family events or out with friends, I get that point of view. But that's not GoPro's market. GoPro's market is action sports, unique video angles, and applications where you don't want to put your phone in danger (underwater video anyone?). And the company is finally starting to get that.

GoPro's new partnerships show its understanding of the market
What GoPro has started to understand more fully is that its cameras aren't just a regular camera. They aren't what people use to take selfies or pictures of their food, they're the cameras you can mount on a helmet or on a surf board and get unique videos that normal cameras or smartphones simply can't match.

That's why the company's newly announced developer program that will support third party compatible solutions is a step in the right direction. It'll allow third party companies to build mounts and housings into products and even access the camera directly from their apps. BMW, Fisher-Price, Telefonica, and Timecode Systems were all announced as partners among the 100-plus developers using the tools already. And they'll be able to unlock some of GoPro's potential. 

The BMW M-Laptimer App is a perfect example of how GoPro can add value that a camera on a smartphone can't match. I've used similar technology at BMW Performance Driving School and you can combine video, telemetry data, location, and more in a simple app. It's content you simply can't get from any other device. 

Fisher-Price is planning to build GoPro compatibility into Jumperoo, Walker, and Gym products, providing a unique perspective of a child's activity. Like BMW, this is an application where GoPro provides a unique offering to consumers that can't easily be replaced by a smartphone camera.

You can think of the upcoming Karma drone as another way GoPro is going to get its camera into unique perspectives. And more of these kind of partnerships and products with unique capabilities will be necessary for GoPro's long-term success.

Spherical video could be a big market for GoPro. Image source: GoPro.

Software is a weak spot and GoPro knows it
The other problem GoPro has had is software, which it is aggressively trying to fix. Today, it's just too hard to get photos or videos off a GoPro camera onto a smartphone and edit them into an album or video. But improvements should be on the way. 

Earlier this year, GoPro bought the apps Replay and Splice, and that technology will presumabily make its way to the GoPro app. They make it easy to modify photos and videos and with Replay you can make an edited video with music and smooth transitions with just a few clicks.

Getting GoPro mounts built into more products is a step in the right direction, but without the ability to edit and share content easily GoPro's future is still in doubt. So, software will be just as key to its future as hardware improvements.

Here's what will make or break GoPro
I think consumers and investors need to come into GoPro with an understanding that GoPro cameras aren't for everyone. It's a niche product for those who enjoy action sports or creating content with video from interesting perspectives. But that's a big market, so if GoPro can stay a step ahead of the competition in its niche markets it can still be a success.

Finally, GoPro is starting to realize its strengths and weaknesses as a company and address them head on. If the new and updated products coming in 2016 are as strong as advertised this could be a great investment long-term. But execution on creating a product that can't be replaced by the phone in your pocket is key. GoPro is starting to "get it" and that's good news for investors.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

GoPro, Inc. Stock Quote
GoPro, Inc.
GPRO
$6.99 (4.64%) $0.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.