The rumor mill is churning that we could see Xiaomi buying GoPro

  • The rumor mill is churning that we could see Xiaomi buying GoPro, the action camera manufacturer.
  • Although GoPro is the most well-known brand in its niche, the company is essentially a sinking ship.
  • Xiaomi buying GoPro would have advantages to the Chinese company, but would they be enough to outweigh the glaring problems?

In the 15 years GoPro has been around, its financial standing has been as wild of a ride as the action videos filmed using its equipment. In 2014, when the company first went public, it was valued at about $3 billion.

Now, with increased competition from lower-priced manufacturers and customers’ reluctance to upgrade their GoPro devices, GoPro is valued at about $700 million. In other words, it’s been a rough four years.

At this point, the only real option to keep the GoPro brand alive is to sell the company to a larger company and use the larger company’s resources to innovate. Sources report, via The Information, that Chinese smartphone manufacturer Xiaomi buying GoPro is an idea that’s on the table.

Xiaomi buying GoPro would provide one significant advantage: retail space in American stores. GoPro has deals with major electronics sellers such as Best Buy which put GoPro products in prominent locations on sales floors. If Xiaomi owned GoPro, it would be a backdoor way to feature Xiaomi merchandise to American buyers, something the company has been trying to do for some time now.

However, the risk-reward ratio of a GoPro purchase might be too much for Xiaomi (or any buyer, really). Since GoPro’s stock price is going down the tubes and the company shows no signs of turning the drop around, spending a bunch of cash up-front might simply not be worth it to Xiaomi.

GoPro is essentially a sinking ship. To survive, it will need to swallow its pride and sell itself off.

Chinese drone-maker DJI expressed interest in buying GoPro but dropped out for that very reason. According to The Information, DJI saw “no value” in GoPro. Ouch.

Speaking of drones, GoPro actually started a drone arm of the business in 2016, releasing its first quadcopter called Karma. At the beginning of this year, Karma was discontinued, and the drone arm dismantled, furthering GoPro’s reputation as a sinking ship.

There’s also the problem of litigation: GoPro is in a two-year-long legal battle with rival Contour over alleged patent infringement. Any company that buys GoPro would have to take on that burden as well.

Ultimately, GoPro’s future rests on the charity of a larger company. In order to survive, GoPro will have to hide under the umbrella of another company’s success until it can create a product that’s in-demand and more lucrative than the action camera business. Will that umbrella company be Xiaomi? Time will tell.

NEXT: Xiaomi Black Shark is official: Here’s what’s up with Xiaomi’s first gaming phone



Source link