Holiday outlook lousy for GoPro
Sales forecast grim for former darling of Wall Street as shares tumble 30 percent
GoPro became the latest hardware maker to say it expects a lousy holiday season.
The company known for its cube-shaped action cameras lowered its forecast for full-year sales and missed analysts’ estimates for the third quarter. The stock tumbled in extended trading. Fitbit, another maker of wearable gadgets, Wednesday lowered its forecast for sales in the crucial shopping period, sending its shares down more than 30 percent.
Chief Executive Officer Nicholas Woodman has been banking on the latest iteration of its Hero camera line, the Hero5, and new Karma drone to juice growth. But GoPro’s lower expectations for sales suggests the devices may not be the hit
with consumers the company was expecting. GoPro needs to drum up enthusiasm for its products to convince skeptical investors that it can reach consumers outside of its core fan base of outdoor adventure enthusiasts. The drone already experi- enced early headwinds. The shipping date was pushed back from October to November and analysts have said that feedback has been mixed at best. GoPro also faces intense competition in the market that’s dominated by Chinese manufacturer SZ DJI Technology Co. and other upstarts that are flooding the market with cheaper models.
Once darlings of Wall Street, both Fitbit and GoPro are young hardware companies that have fallen short of their promise.
Though their devices have little overlap, both have faced increasing competition and signs that their novelty has peaked.
“Most consumers do not see the need to have a dedicated video/photo capturing device, and stick to their smartphones, wrote Jerry Liu, an analyst at Morgan Stanley in an e-mail before earnings were announced. “While the Hero 5 is an improvement over its predecessors and Karma is a good first generation product for the drone market, feedback has been at best mixed.”