Yesterday, GoPro confirmed TechCrunch’s reporting that the company was shuttering its Karma drone division and laying off hundreds of employees. Today, CEO Nick Woodman is at CES on damage control.
In an interview with TechCrunch, Woodman said that the company is shifting focus entirely back to action cams, a market he insists is “absolutely” robust enough to sustain the company. Woodman didn’t comment on rumors of a potential sale beyond noting that the company was not “actively engaged” in the process of selling itself, and said that the leadership would “continue to strategize and run GoPro as though we’re going to be running this independent company ongoing, because we have to be masters of our own destiny.”
While the founder asserted that he believes things would have fared differently for the company’s Karma drone program had it not dealt with its initial “horrible launch,” he said that the decision to shut it down was ultimately due to a “domino effect” that resulted from poor sales of the company’s last-gen Hero5 action camera.
These poor sales led the company to drop the Hero5 Black action camera’s price from $399 to $299 and eventually led to further price restructuring, including a $100 price cut yesterday to the brand new Hero6 Black.
“If Hero5 Black had sold to expectations at its original $399 pricing, we would not have had to change prices across all of our cameras, and we would not have had to do a restructuring and we would have been able to continue investing in programs like our next generation Karma,” Woodman said. “But reality is reality.”
The company seems to have been forced into a situation where it has to fight for stability rather than seek out new opportunities for future growth. Woodman heralds this as a return to “paying much more attention to what our customers really want from us and less about what we want from us,” as GoPro confining its ambitions to a niche market where it’s already king sounds far less positive.
The company’s last gamble sitting in its product line, the newly-released $699 Fusion, is aimed at “prosumers” but resides in a saturated 360 camera market that likely won’t bring too many new customers to GoPro. Woodman concedes the mass-market promises of 360 cameras rely heavily on the software side and that the company’s ability to invest in machine learning technologies that help consumers edit down footage will be key.
“I don’t think consumers want a 360 camera, I think consumers want a camera that makes it so simple and essentially automatic to capture and share themselves in exciting ways, and I think in the future that will be a 360 camera,” he said.
GoPro stock is down nearly 20 percent since yesterday’s restructuring announcement.