Xiaomi could be the hero GoPro needs
long bemoaned the fact that GoPro is a one-trick pony, and its declining sales reflect this fact.
Chief executive officer and founder Nick Woodman did a brilliant job giving cameras a new lease on life while the rest of the industry struggled to deal with the combination of phones and cameras. But being the hippest buggy-whip maker doesn’t count for much when people have foregone horse and carriage altogether.
GoPro’s problem is that it hasn’t done much in 16 years. Its product line is little changed, with mere iterations of the same tiny rugged camera, and the company still relies on its home market for the bulk of sales. Consider that in 2004 — when GoPro released its first camera —Apple’s hottest product by units was the iPod.
The few attempts to diversify have failed. An entry into the drone market in 2016 lasted less than 15 months at a time when DJI and others were enjoying booming growth. Asia accounts for just 21 per cent of revenue.
Xiaomi, meanwhile, can’t be accused of standing still. The Chinese smartphone startup has its fingers in so many pies that it’s hard to keep up. So it makes sense that it would consider making a bid for GoPro, as The Information reported. Xiaomi might offer up to US$1 billion (RM3.88 billion), but didn’t want to overpay, said the website.
A tie-up with another device maker is exactly the future I envision for GoPro.
Right now it’s a technical feat to film a day on the slopes, then take it back to show on the TV in your ski lodge. For many, it’s just easier to shoot with an phone and a selfie stick, which is the crowd Woodman should be chasing.
A combination with Roku, the provider of streaming content players, is one I have advocated for a while. Xiaomi has MiBox, as well as routers and connected devices.
A US$1 billion outlay for Xiaomi shouldn’t damage its balance sheet, and the upside could be immense.
Founder Lei Jun and his team are prepping for an initial public offering, so having a cool American brand could help enamour his company to investors.
It would also give Xiaomi access not only to the United States market, but the global distribution channels through which GoPro gets 46 per cent of its revenue. GoPro sells in 30,000 outlets in 100 countries, which is the kind of reach Xiaomi needs to dilute its geographic concentration.
My biggest caveat is that Xiaomi leave the GoPro name alone and refrain from plastering its brand over everything.