At the State of the Union address, President Barack Obama delivered a message of optimism. The good people at GoPro must be going, “What economic comeback? Why didn’t we get the memo?”
The camera manufacturing company announced it’s laying off 7% of it’s work force. GoPro specializes in small digital cameras favorable for capturing extreme sports as they happen. But yesterday, the only extreme action was the low numbers. Their Q4 2015 numbers revenue numbers were around $75 million below expected figures. Their overall 2015 revenue numbers did even worse. GoPro sales fell off. Perhaps the most telling tale is in their stock prices. In a 24-hour period, they fell 24%, from $14.61 a share to $11.06 a share. And the slide hit one of their main suppliers too. Ambarella fell over 9% in pre-trading. One company spokesperson blames the downturn on mediocre sales from GoPro’s retailers, especially in the first half of the Q4 2015. Apparently, the Christmas shopping season numbers weren’t high enough to make up for the balance. The flop of Hero4 in October made matters worse. GoPro also struggles to attract their small cameras beyond the extreme sports crowd, which is over 95% of the buying public. And there’s little rest for the weary. Instead of saving money, these layoffs will cost GoPro an additional 5+ million dollars.
They’re a couple of lessons to learn here. One flop can really hurt a business. It sounds like 2015 overall wasn’t a good year, then comes the Hero4 fiasco, which made matters worse. I understand that in any business, just as in forms of entertainment, a form of demographic or core audience is important. But don’t make that core audience your only consumers. It’s better to branch out to the general population sooner than later. I’ve used GoPro cameras, but not for extreme sports. These are neat little cameras. My thoughts go out to the ones who are about to lose their jobs because of this misfortune. Can GoPro make a comeback?