GoPro (NASDAQ:GPRO) Might Boost its Stock through Consumer Drones

GoPro (NASDAQ:GPRO) the action camera maker has decided to sell consumer drones, near the end of next year, according to a report recently issued by The Wall Street Journal. These drones would help Go pro to Penetrate in the aerial photography market and diversify its product range from action cameras as its market is now flooded with strong competitors. Although the initiative seems to be good but will it actually help Go Pro’s stocks or not is a question which we can answer only by going in depth upon this matter.

Consumer Drones were first made by a French company, Parrot in 2010 when it launched its AR Drone Quadcopter that sold at a price of $300. Parrot reported, last quarter, that sales of its drones were $24.2 million, 38% higher compared to the previous year’s sales. Last year that is in 2013, a Chinese company, DJI Innovations launched its Phantom quadcopter that sold for $ 1,000 each and generated a revenue of $ 130 million for the whole year.

Both companies have cameras attached with their drones. Other drones that did not have a camera got themselves equipped with GoPro (NASDAQ:GPRO) compatible mounts. This leads us to an important question, will consumers buy GoPro (NASDAQ:GPRO) drone when there are other drones that satisfy the purpose? The answer depends upon portability. Parrot’s AR Drone 2 has a weight between 380g to 420 g and measures 451mm by 517 mm.

Air droid has its Pocket Drone that is a foldable tricopter that can be mounted with a GoPro (NASDAQ:GPRO) and it sells in the range of $549-$599. Nixie’s wearable camera, an even smaller forthcoming device will be able to fly off a person’s wrist and film the person from a distance. According to us it will be the lighter and portable drones that will gain success in the aerial photography market. Teal Jones, a research firm has estimated that worldwide spending on drones would double in a decade that would be from $6.4 billion to $11.5 billion.

The research further shows that in today’s time 89% of the drones are used for military propose whereas 11% drones are used by civilians and after a period of ten years 86% of the drones would be used for military purposes and 14% of the drones will be used by the civilians. GoPro (NASDAQ:GPRO) drones’ success could be diminished if FAA passes additional restrictions against civilian and commercial drones. Also every country has its own laws regarding consumer drones and therefore GoPro (NASDAQ:GPRO) drones’ sales might be limited.

GoPro (NASDAQ:GPRO) stocks have tripled since its launch. Go pro was able to generate a revenue of $280 million in the last quarter of the year. But the fact remains that Go Pro generates a major part of its revenue from Hero camera but to stay powerful in the long term, it has to diversify its product range to consumer drones. But before investing in Go Pro, investors should be beware of its research and development costs that have increased by 116% from the previous year.