They also disclose units shipped (1.15MM in 2011, 2.32MM in 2012 and 3.85MM in 2013).
A simple revenue/units calculation would imply that revenue per unit is increasing ($205 in 2011, $227 in 2012, $256 in 2013).
This is a primitive analysis for a number of reasons, but it suggests that pricing pressure is not the issue. The MD&A, on page 64, also states that higher product costs were the primary reason for the gross margin decreases in 2012 and 2013, and that there was a 14% increase in average selling price in 2012.
Depends on how you define "pricing pressure". By the similar calculation the average COGS per unit in 2011, 2012, and 2013 is $97.11, $128.67, $162.07 respectively. It grows faster than the revenue per unit. Which may mean upward price pressure from suppliers, downward price pressure from consumers, or both.
Yes. I took the question as asking whether absolute revenue per unit was going down or absolute COGS per unit was going up (or both).
Obviously there are different perspectives from which we can look at absolute and relative pricing pressure, and with everything in finance it depends on definitions.
If you use "common size financial statements" technique (e.g. in income statement everything is sized as a percentage of revenue), you will see that COGS ("cost of revenue" in their statements) as a share of revenue grew: 47.7% in 2011, 56.8% in 2012, 63.3% in 2013. That was partially offset by a growth in sales, marketing, general and administrative expenses (SG&A) that was slower than growth in revenue.
I'm curious to know what is creating that margin reduction
Chinese clones and cheap 'good enough' action cameras(mobius) from the bottom, Sony Action Cam from the top.
If you need top of the line action camera Sony is a really strong contender, not only do they offer great picture quality, but also in a friendlier form factor.
I've got the Sony HDR-AS15. Liked the price, and the availability of a standard tripod mount on the waterproof case it came with. As for image quality, the output you get on the SD card doesn't match the capability of the sensor- looking at the raw output from the microHDMI port vs the encoded files- there needs to be many more bitrate options. The top end GoPro models have that right. I don't always need 1080p, and so most of the time I just use 720, but I really want an SHQ 720p mode that cranks the bitrate- that would be beautiful. I've also used it quite a bit for still frame interval timelapse, and have been similarly disappointed in the grainy over-compressed look of them.
verdict: good value, kind of pricey accessories for what you get, just adequate video quality, excellent audio for an action cam, good flexibility (video and timelapse options, HDMI out, mic in, decent waterproof case).
COGS. HERO3 and HERO3+ cameras have lower margins. They have the fancy Ambarella 4k chips in them and volumes are still relatively low so chip prices are high without the scale. COGS is already coming down though, dropped 10% in Q1. Though they don't break it out, they must make insane margins on the mounts and accessories.
Without having looked at the data I would speculate that competition. When competition comes into play you are usually forced to lower your margins. When the Go PRO first came out, AFAIK, there was no good alternative, and thus they could get away with charging a higher price. Now, that there is more competition they have to either lower their prices or raise the specs of the product they offer.
Then again, this is pure speculation and the reason may have nothing to do with competition.
I have a Contour helmet camera. Everyone always asks me if its a GoPro. No wonder GoPro is going public and Contour went out of business a few months ago.
That's the thing, they are never going to out-do GoPro when it comes to marketing. They should just focus on making a technically superior product at a similar or lower price point. There are enough discerning customers out there to make it viable.
Too bad advertising is so important. I thought go-pro was
a narcissistic waste of time, but once I saw the how useful
they were on the production end of the Gold mining show on the Discovery channel; I realized their value. I hope they
continue to improve quality, and lower price points. And
not spend more money on advertising.
GoPro's most effective marketing isn't traditional paid advertising, it's the cool video your friend shot & put on YouTube.
Or if you don't have any cool friends, it's Jeb Corliss' "Grinding the Crack"[1]. Given that many credit the massive success[2] of AWOLNATION's "Sail" (the soundtrack to that clip) to the 26M views that clip has had, I wonder how many GoPro's it sold, too?
Most of their marketing budget must be in the form of event and athlete sponsorships since that's how they get the incredible footage that sells itself. They need to keep maintaining the brand value as similar products come to market to hold market share. This in turn drives sales, profits, and funds innovation and product improvements.
Have to imagine Q1 is a small quarter for them, sandwiched between Q4 holiday sales and Q2 return of summer/outdoor activities. Probably not indicative of full year performance.
They also released a major new generation of cameras in October 2012 (Hero 3), while October 2013 included new hardware but was more of a "tock" (Hero 3+).
I wonder how long the GoPro device lasts before a consumer replaces it. In my mind, a GoPro is something you wear on your head while doing crazy stuff. Even if GoPro never makes technology improvements, it seems like people would be destroying them as part of normal use, like other types of athletic equipment.
I imagine that many people end up losing the device instead of destroying them, given the number of stories where people drop the cameras out of a plane, have the camera film a car crash from the interior, etc. and they survive with some impressive footage.
The case, in my experience, is nigh on indestructible. I have dropped it from the top of a hundred foot ice climb, thumped it in 10 foot Indonesian surf, and kicked it around in my bag more times than I can count. It is extremely durable.
The biggest problem with the product is the battery life is utter crap, particularly in extreme weather conditions. In the cold, on a full charge, it will last about 30 minutes. Overall, it is a truly amazing product and they have made it possible for the average Joe to document his adventures without spending thousands of dollars on hiring a professional photographer/videographer.
Skydiver with 3 GoPros in the family. I started with the 1, got my wife a 2, and then I upgraded to a 3. The V1 is still alive and kicking, but the image quality was so much better on the 3 that I felt like I had to upgrade.
Also, we see new jumpers every year, and the first thing they want to do is start jumping with a GoPro (even if we don't want them to for safety reasons).
I think they're doing a good enough job with new features that people like me will keep upgrading for a while.
Dropped one without the case: lens onto concrete floor and it chipped it.
Consequence of fumbling while trying to take it out of the case for SD card retrieval and charging. Now, I unmount the case, take it to a desk in a carpeted room & open the case.
I found mine washed up on a beach in a waterproof case (had no way of identifying the true owner). No idea how long it had been floating in the ocean before it washed up on the beach, but it works perfectly.
Largest users Ive encountered are motorcyclists and a number of RC flyers I know use them also.
I have a Contour strapped to my Monster, good for recording track days and the daily commute (for insurance).
I had the mount for my GoPro break while I was descending a mountain road at around 75 kph on a road bike. The camera careened down the road for who knows how long. The SD card had popped out of the camera, but in the end both the camera and the card still worked, and I use both to this day.
The waterproof case is strong, however the camera's have a 1 year warranty, and shitty hardware so if you actually use the camera don't expect it to last you very long. I've RMAd at least 5 of them over the years and many of my friends who use them have had bad experiences as well.
I know little of the device or the company, but perhaps someone can help inform me and others. Is GoPro a single product company, with expected growth and decline curves of Iomega or Palm? Or is it divested across wearables or some other sector?
They have 3 models ("white", "silver", "black") of their main product–the Hero camera–which is currently in it's 3rd version (the Hero3). The only other products they produce (to my knowledge) are accessories for the camera.
I don't think comparison to Palm or Iomega is fair. Camera technology seems a little more cemented than storage or mobile operating systems.
I think the rise of sectors like drones will make GoPro a successful complement for a long time. I'm sure they could divest into specialized cameras for these sectors if they wanted to (think infrared/multispectral imaging for agriculture). Right now, however, they seem to have a "Do one thing and do it really well" approach.
"On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups. If you had to reduce it to a sentence, the answer might be: anything that gratifies one's intellectual curiosity."
My Hero3 is one of my favorite tech gadgets. Awesome video quality, stupendous battery life, tough enough for bitter cold days in the wilderness skiing. I hope they continue to make good stuff!
I love the Hero 3 too, but I found the footage I shot with it just wasn't that great until I got a quadcopter (DJI Phantom) to mount it on, along with a gimbal to stabilize it. The footage you can get out of a $1000 rig now is amazing.
I wouldn't be surprised if GoPro acquires DJI, or DJI IPOs themselves in < 5 years.
GoPro has all the characteristics of a successful long-term brand. I recently bought one for my son. I could not find a better product in that category. Many of his friends have one (or more). It produces great video. It is simple to use. They are nearly indestructible.
Established camera makers don't seem to understand how to compete, despite the GoPro being a pretty simple camera made with an off-the-shelf camera SoC that comes with firmware for many of the key features.
It pleases me that the valuation is more than double that of Twitch. A glimmer of hope for life outdoors.
I liked the GoPro Android software better, and the Sony remote, which has a viewfinder built in, wasn't attractive for our use cases. I'd rather have a better app.
Also, the wider field of view on the GoPro without built-in stabilization works better for skiing than built-in stabilization that can sometimes fail to keep up. Aesthetically, I just prefer the wider field of view. A better camera operator might be able to do more with a narrower FoV or even a zoom, but the GoPro is almost always better in practice.
> Also, the wider field of view on the GoPro without built-in stabilization works better for skiing than built-in stabilization that can sometimes fail to keep up.
The AS15 has the option to use image stabilization at a 120 fov or without it at 170.
The only real negative of the Sony (except for maybe available mounts) is the image caption mode is limited to 1920x1080 images.
I'm always told that the Sony Action Cam is better quality.
It's not.
The image quality is comparable to the Hero 3+, with no clear consensus as to which is better (eg [1],[2]). Sony uses the Zeiss lens as a selling point, but still can't do the 4K resolution of the GoPro.
GoPro's image quality is good enough for it not to be something that counts against it in almost any case. A quick look at some of the clips produced by GoPros will give enough evidence to convince most doubters.
GoPro usually wins because of a combination of things.
Firstly there is the form factor. Usually it is seen as a downside, but then you discover that the "wide & short" GoPro factor is the only one you can chest mount safely, and the only one you can helmet mount in the middle of a helmet. That's usually enough to counter any "form factor" arguments (although I'd like to see a "long narrow" GoPro - there are some cases where it is better too).
Then there is the ecosystem. You can get GoPro mounts for anything. Most competing cameras sell adaptors, but then you often run into the form factor problem - the more common "long narrow" form factor doesn't fit into the same space as "wide short".
Then there's the software. GoPro's software isn't fantastic, but it's mostly ok. Most of the competitors have pretty bad software.
>GoPro factor is the only one you can chest mount safely, and the only one you can helmet mount in the middle of a helmet.
I agree on the chest mount, but the helmet? Why wouldn't I be able to put my AS15 on my helmet with the provided stickymount? I prefer long and thin on my helmet...
I actually prefer the AS15's colours compared to the GoPro White (which is closest in pricing), and the Sony cost me €100,- less. (€150 / €250)
Probably depends on the sport. Many like it mounted on the front of the helmet facing slightly down, and the isn't usually possible with (typically) top mounted long-thin cameras.
Nick Woodman founded this company on a $35,000 loan from his mom in 2002. The rise of this company has been amazing to watch. It really is a great product line. What's most amazing is how the camera basically marketed itself with the rise in both action sports and online video. Some damn lucky timing.
I believe it's just that GoPro + Internet allows for more action sports footage from many more perspectives to be broadcast to a wider audience compared to what was available ten years ago. I know theberrics.com uses GoProp for a lot of their footage.
New in the sense that GoPro has opened access to them - we ride, climb, fall, swim from the persons perspective. I'd wager their perennial popularity on the youtubes drives interest/adoption in action sports
The greatest part of GoPro's marketing is their youtube page. They just post videos shot with GoPros and like amateur versions of the same. I go there when I'm feeling like I need a taste of the outdoors and I've also got a GoPro on order, coincidence? Maybe but probably not.
Also note that their (free) video software make creating this style of video incredibly easy, and just happens to have a pre-reel "GoPro" trailer by default. Everyone leaves it in because they want their video to "look pro".
I don't understand this "trend" of posting the entire S-1 document that a small portion of people are going to read in full. I'd much prefer to read a news article rather than trying to skim through it all.
Judging by the amount of upvotes, maybe more people than you think read the document...
Personally, I don't read it all but much prefer reading the sections I find most relevant than reading a summary made by someone else. Also, I think it makes for a better discussion.
That's a confusing statement. No one is forcing you to read the S-1 and a media outlet will definitely pick up the document and write an editorial about fulfilling your desire.
So many TV programmes uses GoPros nowadays. Every outdoor show uses those. They just strap them in the weirdest places. 10 GoPros is something like 5000 euros and with that a fishing show can be sure that they will catch a nice angle when the big fish eats the lure.
Car shows? Just put one camera to every corner, on the roof, on the dash, trunk and what ever. Because why not?
Biking in some lifestyle/feelgood show? You can put couple cameras to every bike. When hiking everybody can have a camera.
No, the picture quality is not as good as with professional cameras, but few second clip from awesome angle with OK quality is better than great quality from bad angle.
"Gold Rush: Alaska" and "Yukon Gold" are both filmed in my local area (Dawson, Yukon, Canada), and both companies strap GoPros onto every piece of heavy equipment they can. If they fall off and get run over, they're out $300, which is a negligible amount of money for productions of their scale.
I really like GoPro, bought one a few months ago. But longterm I really wonder: it seems this will be disrupted from the low end, right? Currently GoPro's have better quality, but in a few years a $50 Chinese clone will also do 4k video at 120 fps. Where can GoPro add value when that happens? There isn't much lock in (a bit in the various plastic mounts). Any thoughts where they will go?
Reliability and durability go an awfully long way. There are already a myriad of clones which do more for less - but they're not GoPros so most people can't be bothered with the "good luck have fun" approach to if they'll work or not.
The term GoPro is used to describe any action-orientated camera in popular consumer circles. Aficionados will always use the correct terminology but my family and friends just refer to portable, waterproof, sports cameras as Go Pro's.
Even you tell them it is a Sony or X brand of helmet cam they will say "So it is like a Go Pro?"
They have become synonymous with the market like Hoover and BiC.
They also provide software services for editing footage and galleries for for you to upload your work. In time I can imagine they will expand to make the editing process as easy as possible.
I hope with their extra money they make from this they can use it to make their products and software more reliable. I've had to RMA at least 5 of their cameras over the years. I've had every single one, minus their first film wrist camera.
It is so infuriating to deal with a camera that crashes, wont turn on, gets stuck in a software update, has buttons fail, has the locking clips crack, wifi remote problems, short battery life.... all while you're in the moment and want to capture something.
I wish to move to another company but it seems there aren't any competitors who match up yet (when my gopros do work properly). There is a camera by AEE that I want to try out. I like the image quality better so far, I wish them luck because without a doubt gopro needs some competition.
Additionally, the net income margin seems to be stabilised at 6%, which seems to me pretty standard for hardware plays.
Still, the most refreshing part of this technology S1 is that GoPro has no losses! Good for them.
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