In not altogether surprising news, GoPro has just announced that they are out of the drone business.
In an earnings report today, GoPro said that the Karma drone would be the last it would make. The company announced significant layoffs a few days ago: the layoffs will bring the workforce down to under 1000 and CEO Nicholas Woodman will take a paycut to $1 as the company struggles to get back on its financial feet.
While the Karma drone struggled from the beginning to reach the skies, with a number of failed release dates and an embarrassing recall after users reported drones losing power and dropping out of the sky, GoPro partly blamed drone regulations for their decision. GoPro said that new regulations being considered in the US and Europe would reduce the overall market for recreational drones. Mostly, however, they cited the fierce competition in drone manufacturing as the reason the Karma has failed.
“Although Karma reached the #2 market position in its price band in 2017, the product faces margin challenges in an extremely competitive aerial market,” says the GoPro statement. “Furthermore, a hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead. These factors make the aerial market untenable and GoPro will exit the market after selling its remaining Karma inventory. GoPro will continue to provide service and support to Karma customers.”
GoPro has been struggling financially for several years, and was counting on the Karma and the drone business to help them retain market share. Now, the company says that it will focus on innovations in the core product lines.
“GoPro is committed to turning our business around in 2018,” said Nicholas Woodman. “We entered the new year with strong sell-through and are excited with our hardware and software roadmap. We expect that going forward, our roadmap coupled with a lower operating expense model will enable GoPro to return to profitability and growth in the second half of 2018.”