Why the GoPro Inc (GPRO) Comeback Just Got Even MORE Difficult

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GoPro Inc (NASDAQ:GPRO) can’t seem to catch a break. It’s competitors are not making it easy to complete its turnaround after a miserable year. Yesterday, drone industry leader DJI announced the DJI Spark, a new $499 drone, along with the new DJI GO app for simplified drone video editing and sharing.

Why the GoPro Inc (GPRO) Comeback Just Got Even MORE Difficult

Source: DJI

Meanwhile, Garmin Ltd. (NASDAQ:GRMN) is coming after the high-end of the action camera market with the new VIRB 360 action camera — a rugged, waterproof camera that shoots 360-degree video in 4K and is compatible with GoPro mounts.

DJI Spark Seeks to Ground GPRO Karma Permanently

GoPro’s Karma drone was a critical release, an all-new product line designed to diversify the company and reduce its reliance on action cameras for revenue. The Karma stumbled, to put it mildly. There was a delayed launch, a competing drone from DJI that offered the same folding form factor and price, middling reviews, then a recall that pulled the drone from store shelves during the holiday shopping season. The Karma was re-launched earlier this year, but now DJI is back with another new drone that’s aimed at putting the nail in the Karma’s coffin for good.

China’s DJI has always focused on the high-end of the drone market. The Mavic — released at the same time as GoPro’s $799 Karma — was a deliberate move to prevent GPRO from making headway with a more affordable, user-friendly option.

With the new DJI Spark, announced yesterday and available now for pre-order for just $499, DJI is pushing even further downmarket.

Like the Mavic and Karma, it’s a folding drone, but even smaller and more portable. It comes in multiple colors, supports control by smartphone, controller or hand gestures, tops out at 31 mph and has a 1.2-mile range (when used with the optional radio controller).

Also announced with the DJI Spark is DJI GO, an app for iOS and Android that aims to eradicate one of GPRO’s remaining advantages: content creation and sharing. DJI GO combines simplified drone navigation with video editing (including templates, filters and music), and online sharing.

Garmin VIRB 360 Takes on GoPro Fusion

Despite the Karma, GPRO is still heavily dependent on action camera sales for revenue. However, with water resistant smartphones and a flood of inexpensive ruggedized cameras, that market has been softening.

GPRO was looking to virtual reality as a way to kick off a new era of premium action camera sales. The company announced the GoPro Fusion in April. The VR action camera can take 360-degree video and shoot standard video at 5.2K resolution. GPRO says its coming in a “limited commercial release” at the end of 2017. Pricing was not announced; however, with the Hero5 Black going for $399, the GoPro Fusion won’t be cheap.

Unfortunately for GPRO, it looks like the competition is also moving into VR and will beat it to market. Garmin’s VIRB 360 shoots 360-degree video for VR at 4K resolution, with 5.7K maximum in standard video mode. It’s compatible with GoPro mounts, making it easy for owners of GoPro cameras to upgrade. The VIRB 360 is rugged, waterproof to 32-feet and — like GPRO’s Hero5 — it can be controlled by voice. Its app supports live streaming to YouTube and Facebook Inc (NASDAQ:FB). The VIRB 360 will retail for $799 and it’s expected to go on sale in June, beating the GoPro Fusion to market by half a year.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.

GPRO’s turnaround plan is showing some positive signs, but with the action camera pioneer down, the competition is not pulling any punches.

The DJI Spark puts the Chinese drone maker in a position to dominate not only the high end of the drone market, but also the middle as well — making it even more difficult for a product like the GoPro Karma to succeed. And any prospect of virtual reality being a new market for GPRO to own while the basic action camera market gets over-run by cheap competition was dashed by Garmin’s VIRB 360 matching the GoPro Fusion on key features, while hitting shelves months before the Fusion even enters “limited commercial release.”

These developments are going to make any GPRO turnaround even tougher.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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