The action-camera maker had been hoping its latest device, the diminutive Hero4 Session that launched last summer, would prove a hit with consumers over the holiday period. But the $399 launch price proved prohibitive, forcing the company into not one but two price cuts, first to $299 and then in early December to $199. For many potential customers it seems to have been a case of too-little-too-late.
The misstep clearly hit GoPro hard. CEO Nick Woodman said as much in an email to Re/code this week, in which he admitted the company “clearly made a mistake” with the Session’s initial pricing. However, Woodman added, “I’m proud of how we responded. We recognized the problem, price adjusted to $299….recognized that wasn’t enough and price adjusted again to $199 which positioned Session as the best entry-level product we’ve ever made.”
In a statement released Wednesday, the company said that during the opening months of this year it expects to spend approximately $5 million to $10 million on restructuring, though most of that will be on severance costs.
It also forecast fourth-quarter revenue to reach $435 million, down from its October estimate, which put the figure at $500 million to $550 million. Official results for the quarter will be released on February 3.
Recognizing more than ever the need to diversify its business, GoPro is developing a consumer drone that it hopes to get on the market some time this year. So far we’ve only been told the name of its flying machine – the Karma – and shown some of the footage from its on-board camera, which looked, as you’d expect coming from GoPro, pretty darn good.
With all that we know now, 2016 looks set to be a real make-or-break year for GoPro.
