On June 25th, the action/sports camera GoPro went public and their stock grew 50% in value overnight. Their 2013 earnings were almost 1 billion dollars and their small, tough, and waterproof camera has become the world's highest selling camera. Can this company's growth continue?
A few days before GoPro went public I was asked by at least 5 different photographers if I would buy their stock. I personally decided that I wouldn't because I feel like this market is too volatile but there are some very credible reasons why GoPro is poised to remain at the top for a long time.
Yes, most people already have incredible video cameras in their pockets shaped as phones but the GoPro does have a few unique tricks up it's sleeve. It's smaller than a phone, it's lighter than a phone, it's cheaper than a phone, it's more durable than a phone, it's more waterproof than a phone, and it can be attached to almost anything safely and easily. I love my iPhone but I'm not able to take it down a water slide or go diving with it (out of the box). I wasn't able to strap my iPhone to my DJI Phantom or my helmet when I go white water kayaking.
At the moment the GoPro can do many things that a high quality smart phone cannot do and while that is the case, the GoPro will continue to sell.
There are other sports cameras out there. I bet you've seen them but I doubt you can remember their name. They show up on the market for $300 one day and 3 months later you can find them on Amazon for $99 or less.
Every company who has attempted to compete with GoPro has failed and each time they do, GoPros market gets larger.
You know your company has reached the top when hundreds of other third party companies can make a living selling products to supplement your product. My DJI Phantom came with a mount to hold a current GoPro. When I bought the new electronic gimbal, they were made to hold only GoPros. Today, if your product could be enhanced with video, you're going to make a GoPro mount for it.
As long as GoPro can stay in front of other tough cameras, manufacturers like DJI will single-handedly keep them in business.
The number one feature of the GoPro is that it's waterproof. These things are ALMOST indestructible. This taunts every GoPro owner to do dumber and dumber stunts until the camera is eventually broken or lost. I have now broken 1 GoPro lost 2 GoPros that were hooked to 2 DJI Phantoms that I destroyed by crashing them into water. Even if you can't break a GoPro you have a huge chance to lose them during every ridiculous adventure you take them on.
So now this somewhat affordable $300 camera can cost $1200 in my case because I've purchased 4 of them. Even if you baby yours you will be tempted to buy more cameras to capture more angles of the same event.
That's it. This is the only reason why I believe GoPro will eventually cease to exist; cell phones.
Most current phones can shoot 1080p video in multiple frame rates. My iPhone can actually shoot 120 FPS at 720p (the exact same as the GoPro 3). A few of the current phones can actually shoot 4k video (something that the GoPro currently cannot do). The footage out of a GoPro is slightly better than my iPhone but that really isn't the issue. The issue is size, durability, and cost.
Although I could strap my iPhone to my Phantom, I'd prefer not to. As of right now a new smart phone costs around $600 - $1000. I'd rather not risk my precious phone every time I want to record something treacherous. A GoPro is still lighter and more durable than my phone as well so it's an obvious choice when it comes to mounting a camera on a moving object or filming around water.
You could make the argument that a GoPro will always be one step above cell phones when it comes to features and video quality because it's only made to do 1 thing but that may not always be the case. Who would have dreamed that cell phones would have already destroyed the point and shoot camera market. As our phones get cheaper each year and the quality of the cameras in them keep getting better, it will eventually become easier to strap your phone to your head than it is to buy a separate GoPro camera for the job. The Samsung S5 is already "water resistant" and my buddy has a 100% waterproof case for his iPhone. Think about how many old cell phones you have laying around your house. Imagine if they all recorded amazing 4k video. You wouldn't buy a separate product to record video, you'd grab that old cell phone rotting in your sock drawer and you wouldn't bat an eye when you break or lose it. That will be a reality in just a few years.
For those of you worried about the massive size and weight of smart phones these days, think about the new wave of smart watches. Imagine a waterproof watch that can shoot in 4k video at 120fps. It already has a band on it that could be strapped to almost anything instantly. It's smaller than a GoPro and you already have it with you all the time.
As of today GoPro makes a product that fills a void that we didn't know existed just a few years ago. They have done an incredible job of creating a market and then completely dominating it year after year. The question now becomes; how long can they keep this up? If they adapt with the market they could easily remain on top for the next 50 years but if they continue to make the same product with slightly better specs each year, our cell phones will eventually surpass them.
Who knows, GoPro might end up making the ultimate smart watch / action camera and turn the industry upside all over again. I'm a huge fan of their products and I wish them the best of luck but I'm still not willing to buy their stock today.