While consumer drone leader DJI makes headlines at this week’s CES with new products, GoPro announced Monday it would pull out of the drone business after it sells its remaining stock of Karma drones.
The news comes after word leaked last week that GoPro was about to lay off more than 250 workers from its aerial division. The layoffs and Karma kill-off comes amid estimates that GoPro’s fourth-quarter revenues will fall more than $100 million short of projections.
“Although Karma reached the No. 2 market positions in its price band in 2017, the product faces margin challenges in an extremely competitive aerial market,” GoPro said a statement published by the website PetaPixel. “Furthermore, a hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead.”
GoPro pioneered the point-of-view action camera and developing drones to carry its compact video cams seemed a perfect fit for its business model. But GoPro saw its sales slump in 2016 as companies began flooding the market with cheaper, sometimes, comparable alternatives to the GoPro.
GoPro CEO Nick Woodman has been trying to diversify GoPro’s product line. It had entered a partnership with DJI, according to Tech Crunch, before DJI backed out, leaving GoPro to develop the Karma drone on its own.
The Karma struggled from the start, thanks to a battery that was disconnecting in mid-flight and causing the drone to crash.
GoPro recalled the drone and enjoyed mild sales success after refine Karma went on sale last February.
Source: Peta Pixel