GoPro has been the dominating brand in the action camera market for over 14 years since its formation in California in 2002.
We have all seen amazing footage from GoPro cameras strapped to skis, snowboards, surf boards people, pets from skydivers in flying suits to water rapids.
The growth of YouTube and other social media has made GoPro the go to brand.
The large mainstream camera manufacturers with comparable action cameras marketed at half the price have not been able to make significant inroads into the action camera market.
DJI which is short for Dajiang”, a Chinese technology company founded in 2006 in Shenzhen, China, became the market leader of the civilian drone industry.
As recent as 2014, DJI and GoPro were helping each other be market leading brands. Both brands have a very loyal user community.
DJI encouraged people who bought its drones to use GoPros to shoot aerial footage, and GoPro showcased the most stunning drone videos.
The two had talks to produce a GoPro-branded drone, according to DJI CEO Frank Wang, but Wang claims that GoPro demanded two-thirds of the profits, and he thought DJI deserved the 2-1 split in its favor.
Also it has been reported that the founder of GoPro Nick Woodman treated Wang disrespectfully and with distain, like a humble GoPro Chinese sub-contractor.
DJI designed and launched its own drone action camera and have now grown to over a billion annual turnover company.
As we have written in our previous articles in 2016 GoPro is now facing major business problems and issues with a tumbling share price and the recall of Karma their first drone in November 2016, less than 6 weeks after its launch.
There is still no relaunch date according to the GoPro website today see above, it is still saying “Coming Soon”
While the fortunes of DJI are excellent with spectacular growth, profits and the successful launch of four new products Phantom 4, Phantom 4 Pro, Mavic Pro and Inspire 2.
Will DJI Launch a bid for GoPro
GoPro’s 2016 last quarter results are due out soon and the share price has recently recovered for a low of $8.54 to $9.51 yesterday. The highest share price for the last 54 weeks was $17.68.
Judging by all of the problems with Karma and disappointing GoPro5 sales the last quarter results could be poor. This could make GoPro a major bid target in now in early 2017.
Last year DJI took a minority stake in Hasselblad, the iconic Swedish camera company. The companies also announced a partnership to work together on high-end camera drones that would combine DJI’s drone aerial technology with Hasselblad’s cameras.
Hasselblad, which was founded in 1941, was once known for making the most advanced cameras on the market. Their cameras were even used by NASA throughout the 60s, meaning theirs was the technology used to create those iconic moon photographs from the Apollo missions.
TechCrunch, have now reported that DJI has acquired Hasselblad, not outright, but taking a majority stake in the camera company.
Despite the Hasselblad investment we don’t think that DJI could resist a bid to takeover GoPro.
There are financial journal reports starting in 2015 saying that DJI are considering an IPO in 2017, so taking over a US quoted company could be a good growth strategy for DJI.
Who Else is Interested in GoPro
In December 2015 the GoPro share price jumped by 16% on analyst speculation of Apple bid. GoPro shares opened at $17.25 and rose as high as $19.56 before closing at $18.83.
The current share price in January 2017 is around half this at $9.51. This is a stark comparison to GoPro all-time high of $93.85 in October 2014.
We think that GoPro could still be a target for Apple, who have cash reserves of over $231 billion.
Garmin are another potential bidder. They have just launched their new second generation action camera which looks like a clone of a GoPro. The company’s background is in the personal navigator space, tracking.
The new Virb Ultra records at 4k and allows the user to control its functions through voice commands.
It records data during the video recording. The info collected by the barometer, an accelerometer, a compass, a gyroscope, and GPS is then available to be overlaid on the recorded video.
The performance data includes: speed, pace, altitude, G-forces, hang time, jump height, distance, grade, elevation, pitch, roll, course, bearing, and GPS coordinates.
Garmin are also quoted on Nasdaq with a current share price of $48 and a market capitalization of over $9 billion.
It is going to be a very interesting 2017.