GoPro chose CES 2017 to announce it will re-launch the Karma drone in 2017. According to GoPro, the issue that brought its drones out of the sky has been identified as “power loss due to a mechanical issue related to securing the drone’s battery.”
GoPro says it has fixed the design flaw and is currently finishing up testing. It says further details will be provided in February outlining the plans for the GoPro Karma worldwide re-launch.
2016 was not a great year for GPRO. Demand for action cameras softened even as additional competitors entered the market and smartphones began to emerge as a threat: Apple Inc. (NASDAQ:AAPL) released a water-resistant iPhone 7 that could shoot 4K video and 120 frames per second slow motion 1080p video. There were manufacturing challenges with its new Hero5 camera and the Karma drone recall capped things off. After the dust settled, GoPro stock shed over 50% of its value in 2016.
However, GPRO was able to sell the Karma Grip (handheld camera stabilizer) component of the Karma drone separately in time for Christmas, and the company reported GoPro camera sales up 35% on Black Friday compared to the previous year.
If it is able to successfully re-launch the GoPro Karma in 2017 it will have missed out on the 2016 holiday shopping season, but will have most of the year to build up sales and recognition leading into next Christmas.
Since announcing the Karma drone re-launch, GoPro stock is up over 2.5%, reflecting the possibility that the company is finally putting a terrible 2016 behind it.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.