Soft Relaunch for GoPro’s Karma Drone amid Lawsuit, Terrible Quarterly Earnings Report
BY Alan Perlman3 February 2017
Without much fanfare (or really much promotion at all) GoPro has quietly added the Karma back to its website.
If you remember the recall of the Karma that happened a few months back due to in-flight battery issues that caused it to crash suddenly, you might understand why GoPro wouldn’t want to do a lot of shouting about this relaunch. Why open themselves up for sniping?
What Difference Does a Few Months Make?
At the time of the recall, we wrote about how GoPro was doing the right thing by those who had purchased the Karma, and not only providing refunds but also giving a free Hero5 Black camera to those who bought the defective drones. Which certainly was great for demonstrating their values, and appeasing frustrated customers.
Nonetheless, it may be a stretch for those same people to want to buy (or rebuy?) the new Karma after the experience they had.
And the price point doesn’t help.
The Karma is being relaunched in a very different drone market from that of a few months back.
We’re thinking here of the recent sweeping layoffs at both Parrot and Autel Robotics, but also of DJI’s simultaneous launch of the Inspire 2 and Phantom 4 Pro back in November. The layoffs signify a volatile market, and DJI’s launches signify stability in the midst of that volatility.
While the Inspire 2 and Phantom 4 Pro are priced far outside of the Karma, and don’t go head-to-head with it, their successful launches have helped further secure DJI’s position in the mind space of drone consumers in general.
Think about it. If you’re going to spend $1,000 on a drone, you want to make sure you’re getting a reliable machine. The Karma costs $799 without a camera. After you add a Hero5 Black Camera (or camera of comparable quality), you’re looking at $1,099.
But for $999 you can buy a DJI Mavic with a camera included.
$1,000 is a lot of money, and most drone consumers at that price point may not want to take the risk on an unvetted product, which is what the Karma still is.
Lingering Legal and Financial Troubles for GoPro
Add to the PR nightmare of Karma’s recall the fact that a class action lawsuit was filed against GoPro related to the Karma recall back in November, when the recall was first announced.
The suit seeks to recover damages against GoPro for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
The lawsuit claims that GoPro made “materially false and misleading statements regarding the Company’s business, operational and compliance policies,” by failing to inform people that the drone would fail. Yikes!
The lawsuit is still being fought out in court, and certainly won’t help GoPro’s uphill climb with establishing the Karma as a viable alternative to drones manufactured by big industry players like DJI and Parrot.
And add to this the fact that GoPro released its quarterly earning yesterday and they are not good. In fact, they are terrible.
In yesterday’s report, revenue was down about $40 million of what had been projected by analysts.
Back in November GoPro had to layoff 15% of its workforce, and yesterday’s earnings report led to their stock being 10% down by the end of the day. This is not good, to say the least.
Despite all this doom and gloom, we do want to say that we’re excited to see another player trying to elbow its way into the crowded consumer camera drone space. DJI makes great drones, but what a dull world it would be if we only had one option when it came to choosing which drone we could fly for aerial videography.
So here’s to diversity, and the hope that the Karma may have a great rebirth. We’ll be curious to see what unfolds from this relaunch in the coming months, and we’ll be certain to keep you posted with updates.