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January 8, 2018

Bad Karma: GoPro will exit the drone market, cut more than 250 jobs

by John_A

GoPro just can’t catch a break. On Monday, January 8, the action camera company announced it will stop manufacturing the Karma drone and exit the aerial market entirely in 2018. As a result of the move, GoPro will cut more than 250 jobs. The company has also lowered the price of the Hero6 Black to $400.

The price drop follows the December 10 holiday price reduction on the Hero5 Black and Hero5 Session. “Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier,” CEO Nick Woodman said in a statement. “Our December 10 holiday price reduction provided a sharp increase in sell-through.”

As noted in our GoPro Hero6 Black review, introducing the camera at $500 while the Hero5 Black remained on at its launch price of $400 seemed perhaps a bit overconfident. Both cameras are now selling for $100 less, while the smaller Hero5 Session has also been reduced to $200. The older Hero Session has been removed from the lineup. While GoPro said sales of the Hero6 met expectations last year, the company noted Hero5 Black sell-through doubled after the price reduction, while Hero5 Session sell-through tripled. A lower price on the Hero6 Black will hopefully spur a similar increase in demand.

As for the Karma drone, GoPro said it was unable to overcome the challenges of a competitive market. It will continue to sell the drone while stock remains and is offering $200 off when bundled with a Hero6 Black. The company will still support Karma customers for the foreseeable future. The Karma drone got off to a rocky start after customers reported midair battery failures, causing the quadcopter to fall out of the sky. Although the problem proved easy to fix, a safety recall delayed sales and GoPro simply couldn’t keep up as rival DJI continued to pump out new models.

In addition to reducing its workforce from 1,254 global employees to “fewer than 1,000,” Woodman’s cash compensation for 2018 will be cut to $1. In all, GoPro is aiming for an $80 million reduction in operating expenses in 2018.

There was at least one tidbit of good news in the statement, however. Sales of the Fusion, GoPro’s 360-degree action camera, were better than expected.

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