Will Action Cameras Take up the Sales Slack?
Last week, GoPro reported first-quarter sales of 1.3 million action cameras and quarterly revenue of $363 million — a year-on-year increase of 54 percent. Our forecast expects that 8 million wearable cameras will be sold worldwide in 2015, up 34 percent from 2014. The imaging segment has experienced an impressive level of growth, attracting competition from adjacent markets.
This is in contrast to the market for personal navigation devices, which continues to shrink as consumers employ smartphones for turn-by-turn directions. Device convergence has been particularly tough for Garmin and TomTom, with the segment leaders now looking to related markets to fill in the gaps.
TomTom said that the market for personal navigation devices shrank by 17 percent year-on-year in North America to 700,000 units, and by 8 percent in Europe to 1.4 million units. Free mobile apps and services have disrupted the industry and there aren’t indications this will reverse. However, TomTom has managed to keep overall revenue steady despite a decline of about 13 percent in the volumes of navigation devices sold.
The top-two brands, Garmin and TomTom, have experienced some success expanding into location-based products such as sensor-filled wearables. Fitness bands and sports watches have made up for lost revenue, and the companies have now entered the market for action cameras. Last week, TomTom introduced its Bandit Action Camera — a 1080p video camera with on-device editing capabilities. The device has GPS sensors to tag location, speed, acceleration and altitude, and can add heart-rate information with an optional accessory.
TomTom joins Garmin — which introduced an action camera in 2013 — and a parade of companies including Canon, JVC, Polaroid, Sony, Toshiba and Xiaomi that see the action imaging market as an extension of their product lines. Even Apple was granted a patent for a wearable camera earlier in 2015.
GoPro is looking to innovate with drones and 360-degree video capture after buying Kolor, a French company that makes virtual reality software. The brand remains synonymous with action cams, making competition tough for rivals.
Makers of personal navigation devices face a shrinking market as consumers continue to substitute dedicated products with smartphone-based solutions. The companies have long been aware of the competitive threat — Garmin, for example, introduced its Nuvifone GPS handset in 2008 together with Asus, then announced it would stop making phones after several years of weak sales.
The market for action cameras is significantly smaller than that for handsets, and is unlikely to offer much opportunity to more than several competitors. There’s no reason to assume it’s immune to the same convergence that’s absorbed the market for standalone navigation devices, either. Without leapfrogging GoPro’s features, there’s unlikely to be much action here for makers.
 |
If you’d like to receive free Daily Insight |
Twitter
Facebook
LinkedIn
Email