Known more as a media company than a product
Go Pro was ranked #1 on Youtube's first ever quarterly brand channel leaderboard. It was more popular than well established brands such as Warner Brothers, Sony and Nintendo receiving more than 450 million video views. GoPro does not make any money from media content but they do have plans to develop a GoPro channel on Xbox Live with Microsoft. Going forward GoPro is viewing themselves as more of a media brand than a consumer product.
Not a camera but capture device
GoPro was the #1 selling camcorder in the US in 2013 and according to the NPD Group had 45% market share ahead Sony and Canon. The growth is impressive considering shipments of digital cameras fell from 142.7 million units in 2011 to 76.2 million last year. Its interesting to see that in their prospectus they refer to their product as a capture device rather than a camera. The shipment table below from their prospectus was concerning with year on year units shipped down for the most recent quarter.
They explain away the decrease due to comparable issues from the previous year. In 2012 their new camera was delayed from 4th quarter 2012 to 1st quarter 2013 which resulted in first quarter seasonality that was not normal. It all sounds a little confusing and the decrease is not something you want to see especially in an IPO. Worringly, product costs for their new 'capture device' were 67% greater than previous versions but the average selling price was 19% higher leading to margin compression.
Their strategy of focusing on specialty retailers rather than consumer electronics paid off. As selling in surf, ski and motorsports outlets meant that GoPro was the only camera device in the store. It is now distributed everywhere including Walmart. Their instore advertising is amazing with mounted TVs. The footage below automatically draws everyone to their product stand. At the end of 2013 they had over 25,000 displays. GoPro is already an international company with 44% of revenue overseas inline with most global companies.
Go Pro be a hero not an IPO
While I love the product I think I'll be a hero on the sidelines and watch the great Youtube footage. The media side of the business is interesting but at the end of the day Gopro is a camera (not a capture device) and consumer electronics businesses are very tough to sustain in the long term.
Jason
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