Things aren’t looking too well for action camera manufacturer, GoPro. In its earning report yesterday, the company announced that it would be exiting the drone market entirely. The company entered the drone market in 2016 with the Karma drone. Further, the company will also reduce its global workforce to under 1,000 employees, while GoPro Founder and CEO, Nicholas Woodman would reduce his cash compensation for 2018 to $1.
The company notes that “margin challenges in an extremely competitive” market and regulatory challenges in Europe and United States have made the aerial market untenable for the company. GoPro will now exit the market after it sells it remaining inventory of Karma drones. However, the company has assured its customers that it will continue to provide service and support to them.
GoPro ended Q4 2017 with cash and cash equivalents of $247 million, an increase of $50 million as compared to the previous quarter. “"As we noted in our November earnings call, at the start of the holiday quarter we saw soft demand for our HERO5 Black camera," said Woodman. "Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier. Our December 10 holiday price reduction provided a sharp increase in sell-through."
To recall, the GoPro Karma Drone was launched at $799 back in 2016. However, a few weeks later, the company recalled all drones citing a small number of cases where the batteries got disconnected in mid flight, resulting in a loss of power. A few months later, the company relaunched the drones following a redesign of the battery hatch.
There are also reports that GoPro might be sold completely. CNBC reports that the company hired J.P Morgan Chase a few months ago to help it seek a potential sale. Sources told the website that no sale is assured, and the company is not in any active talks with a buyer.