Action-camera maker takes another stab at a smaller design following disastrous Hero Session, but shifts in business make it less risky this time
GoPro Inc. apparently doesn't scare easily. This time around, investors have less to fear as well.
The action-camera maker's annual lineup announced Wednesday morning includes a new attempt at a smaller form factor.
The Hero11 Black Mini is smaller and about 14% lighter than the new flagship Hero11 Black also announced on Wednesday. It costs 20% less than the flagship, and customers can get an even bigger discount if they sign up for GoPro's fast-growing subscription service, which bundles a camera with things such as cloud-based storage, enhanced warranty coverage and discounts on accessories and other gear.
But GoPro has seen big problems come in small packages before.
The last attempt at a shrunken camera -- an ice-cube-sized device called the Hero Session -- was a significant misfire.
GoPro launched the first version of the Session in mid-2015 but had to chop the price three months later because of slow sales.
That also caused the company to take a $19 million charge during the quarter of the camera's launch for "price protection" -- covering retailers stuck with unsold inventory.
An updated version of the Session the following year didn't fare much better. By the end of 2017, GoPro effectively threw in the towel by slashing prices to clear inventory and telling analysts it would "retire" the camera.
There are some important differences to note this time around. The first Session came during a year that GoPro elected not to update its flagship Hero camera.
That flawed product strategy meant a lot was riding on the tiny camera, exacerbating the financial impact of its poor performance.
GoPro's quarterly revenue averaged a 42% year-over-year drop in the four quarters following the first Session's launch compared with its rise by an average of 62% per quarter in the previous four periods.
The Session was considered underpowered, with a less robust image processor than the main Hero cameras despite costing $400. The new Mini contains the same image processor as this year's main Hero11 update.
GoPro also looked like a different company then, with a market value still inflated from the hype over its 2014 listing on the premise that the niche market for action cameras was about to explode.
Today's GoPro benefits from humbler assumptions, with a market value more than 90% off its peak and camera shipments still working their way back to their prepandemic average of a little over 4 million units a year.
And, like other makers of premium tech gadgets, GoPro is also dealing with the near-term pain of the slowing economy.
The stock is off 17% since the company trimmed its full-year unit-sales target by about 6% during its second-quarter report last month.
Furthermore, competition remains strong -- smartphone cameras keep improving, and drone company DJI chose to announce the third generation of its GoPro look-alike Osmo Action camera on Wednesday.
That sets a low bar for the new Hero11 cameras. But GoPro has shown it can hold its competitive ground, and its growing subscription business adds some valuable recurring revenue to the mix.
Paid subscribers surpassed the 2 million mark last month and have maintained a double-digit growth rate even following an early pandemic surge in 2020.
It is a better time for GoPro to try thinking small.
TOKYO: Typhoon Nanmadol made landfall in southwestern Japan on Sunday night, as authorities urged millions of people to take shelter from the powerful storm's high winds and torrential rain.
PHUKET: Four tourists from Saudi Arabia, three adults and a child, were slightly injured after a go-kart they were riding rammed into a power post in Muang district of this southern island resort province on Sunday, the Tambon Chalong Municipality said in an announcement.
TOKYO: Japanese policymakers expect that a further reopening of Japan's borders to foreign visitors will breathe life into inbound tourism that had been hit by Covid-19 travel restrictions.