GoPro Being Acquired by Xiaomi?

GoPro Being Acquired by Xiaomi

Last week the site The Information posted a piece stating the possibility of GoPro being bought out by Chinese electronics company Xiaomi which are the makers of the main competitor to GoPro in the same form factor with the Yi camera line.   We liked the Yi 4k+ last year as it delivered pretty acceptable quality in 4k 60p in a GoPro like the body+enclosure design. We were not thrilled by the bit rates or the slow-motion quality but it was in the running for the best alternative action camera with a lower price.

If the rumors are true Xiaomi will be consolidating the Action camera market and improving the Yi camera line overnight by rebranding it to GoPro as the name might be just as valuable as the technology being acquired.  Most of the current Yi camera products share the components with pre Hero 6 Black cameras like the Hero 5 Black as they were based on the Ambarella chips that GoPro used for a decade.

The rumor also states that if an offer is to be made, Xiaomi will be reluctant to overpay for the struggling company as GoPro has been shedding workforce and revenue for several quarters.  The current GoPro Market Cap is around 700 million which means Xiaomi may snatch the GoPro name for less than 1 Billion which is quite a deal considering the company was valued over 10 Billion in 2014 when the stock was on fire.

What could happen with a GoPro sale?

The action camera market is very crowded with many copycat companies eating GoPro’s margin with similar products that sometimes look identical to the Hero cameras. It is clear that this is a case of Chinese tech companies capitalizing on the GoPro success with mostly sub-par copied products that while adequate for many are short of the GoPro quality (See SamplesHere) that has characterized the true brand.  The exception here is Xiaomi which is the best of these cameras with actual innovation and video quality that is getting very close to the Hero 5 Black.

GoPro still has the edge on the video quality front including high frame rates with their excellent Hero 6 Black for MSRP $397.00 But with sales dwindling and the failure of their Karma Drone to take on DJI’s Phantom line, GoPro has had a rough couple of years.  A Xiaomi buy-out offer could put new cash and resources to expand the GoPro line into new frontiers including rebranding the Xiaomi Drones with the GoPro name.

Xiaomi is also into Drones with Xiaomi Mi Drone 4K Quadcopter!

Critics of the rumor will point out that GoPro is more a name than a tech play now as the technology for action cameras is now widely available but the fact remains that GoPro still is the best camera for action pros with reliability and high image quality that is rarely matched. The only camera that comes even close is the Sony Action Cam which is higher in price when you factor in accessories.

So merging the GoPro line including technology like their new SoC the GoPro GP1 processor with the Yi camera line will instantly gain market share of the action camera market by creating a single product range to dominate the segment. The main problem to this remains the adoption of the smartphone as the camera of choice when on the go.

Many phones now can withstand low & high temperatures as well as being underwater for short periods of time at low depths.  These remain the most direct competitor to the action camera market.  The miniaturization of larger sensor cameras is also eating on the GoPro monopoly on the TV and film industries that used them to great effect in the last decade.  The mirrorless camera revolution has better image quality than the GoPro and offers the ability to use a lens selection that is unmatched.

Lots of competition also means there is no easy way out for GoPro. Innovation is not that easy when so many cameras match or exceed their specs and while more expensive, the race to the bottom continues with electronics manufacturing increasing yields on sensors and other components to reduce pricing on large economies of scale.  If GoPro sells itself to Xiaomi it will probably lose most of its independence and become just one more Chinese owned company that may or may not survive the test of time.  For some, it really means giving GoPro a lifeline before it disappears on its own. For shareholders, it may mean getting something instead of nothing over the long term. Not an easy place to be.

GoPro HERO 6 vs YI 4K+!! by AuthenTech – Ben Schmanke:

What if?

What could happen if GoPro released an SC2 chip with the release of a killer GoPro Hero 7 Black camera either this year or in early 2019?  We could see GoPro getting more sales and gain enough time to figure out how to spin the company forward.  GoPro was always an innovator and their products surpassed conventional designs in specs and features with performance that is still best in the market.

If GoPro can innovate itself out of its troubles by streamlining their product range into just a couple of very high-quality products that leave enough profit margin to return to continued profitability that selling itself to Xiaomi might not be the best course of action.

We think that if GoPro could come up with a camera with the following specs:

  • 4k 120fps (Time Limited)
  • 4k 60fps continuous
  • 1080p 480fps 
  • 720p 960fps
  • 180-degree lens
  • Sensor Crop modes
  • 100Mbps codec with ProTune
  • 4:2:2 10 Bit color at 150Mbps for 30p, 24p and 25p video modes at 4k.
  • Optical Image Stabilization O.I.S.

It could bring a lot of attention to the camera line again especially if the quality is not compromised by aliasing and moire on higher frame rates.  Even at a higher price like $599.99 a camera like this would probably sell really well and make GoPro the first choice for action cameras once again. The specs above are not a pipe dream considering Sony is working with similar specs in the labs with their motion eye technology for smartphones and mirrorless cameras.

If GoPro is able to go back to their roots and deliver a truly innovative product then we could have the company return to profitability and gain enough time to figure out the course for a future in which GoPro is able to grow and expand into markets like dashboard cameras, smart doorbells, IOT devices, drone cameras (Not Drones Themselves) and surveillance where it is really just starting to get interesting.

Imagine having a dashboard camera in your car that you can detach and take with you when needed and even attach it to a drone or use as an intelligent doorbell based on a universal dock. That would make GoPro a much more valuable camera with many uses that transcend the action camera market and creates a truly valuable proposition.  We are fans of GoPro and would like to see it succeed and continue creating excellent products.  Let’s hope they can do it for a long time. – HSC

Disclaimer: We do not own any GoPro or Xiaomi stock or have any direct or indirect information about a possible merger between GoPro and Xiaomi or any other electronics company. Our essay is an opinion piece based on the rumors brought up by “The Information” website.  We are not responsible for any misquotes or information you derive from this article. GoPro or Xiaomi did not approach us in any way on the creation of this post.


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