Shares of GoPro soared on Thursday following reports that the beleaguered action camera maker might be considering a takeover bid from Chinese technology giant Xiaomi.
A bid from Xiaomi, which competes with Apple and Samsung in the market for smartphones; and GoPro for action cameras, might help to inject new life into a company that has been struggling to innovate for more than a decade.
GoPro, founded by surfer-turned-entrepreneur Nick Woodman, could potentially fetch as much as $1 billion from Xiaomi, according to The Information, which broke the story citing sources familiar with the matter on Thursday.
If the deal goes through, GoPro would enter into a company that has its own action camera and rivals Apple as one of the largest smartphone brands in the world.
In 2015, Xiaomi introduced the Yi Action Camera for $64, more than half the price of the GoPro Hero. In addition to its smartphones and GoPro-rivaling cameras, the company also has a line of drones, a market that GoPro exited earlier this year citing competition.
In an interview with CNN in January, GoPro’s CEO said the company was “absolutely” open to exploring a merger or acquisition opportunity, saying it’d be “irresponsible not to” consider it. The company, he said, would be interested in becoming part of a larger parent company that could help GoPro scale.
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SportTechie Takeaway
GoPro’s biggest problem is that it hasn’t innovated its product line much since its inception more than 15 years ago. In addition to its core product line — its Hero cameras — GoPro launched the tinier GoPro Session, an ice cube-shaped waterproof camera that never really took off. It tried to expand into content, but had to eventually give up on that business and partner with Red Bull. It also tried to get into the drone business, but folded that business in January amid competition from DJI and others.
A takeover from Xiaomi would give it access to deeper pockets and talent with experience in action cameras, mobile technology, wearables, drones and smart TVs –via Xiaomi’s Mi Box– which could help to reinvigorate its content strategy and increase its relevance in the U.S. once again.
GoPro is known as a popular brand that has long supported the action sports community with rugged cameras that can shoot high-quality video from the perspective of skiers on mountain slopes, skydivers in freefall and surfers from the barrel of waves, but it’s important to note that the company has attempted more recently to crack the traditional sports world as well.
In 2016, FOX Sports outfitted referees with GoPro cameras to give viewers a unique perspective during the Big Ten championship football game. And this past November, Golden State Warriors Chief Operating Officer and longtime sports executive Rick Welts joined the GoPro board of directors.