The slimmed down product portfolio comes after GoPro reported $436.6 million in revenue for the fourth quarter, a 31 percent drop from last year. The company also projected revenue of $1.35 - 1.5 billion for 2016, a drop from $1.6 billion in 2015. GoPro's stock has been getting hammered as a result, and the company says it will no longer offer quarterly guidance.
Going forward, the company will only have the Hero 4 Black ($499.99), Hero 4 Silver ($399.99), and Hero 4 Session ($199.99) in its lineup, cutting the cheaper regular Hero, and other Hero variations from the mix for better focus.
It's hard to argue these aren't some of the best action sports cameras on the market. It's the software GoPro CEO Nick Woodman and many financial analysts know need to change for the company to be saved.
It was actually surprising how much Woodman and chairman Tony Bates spoke on software during the company's call with analysts on Wednesday.
Woodman says the company reduced its workforce by 7 percent in January and reallocated resources to accelerate software and hardware development. Specifically, GoPro will enhance its software line-up with a new content management system that will enable GoPro users to better share content.
"In software, you'll see the beginning stages of this new experience in the March release of our entirely new content management application, GoPro for Desktop. GoPro for Desktop represents a breakthrough in convenient offload, access, and editing of GoPro content.
"It provides tools to easily sort large amounts of footage, as well as trim and share directly to Facebook, YouTube, and other social media platforms," Woodman said.
In the past, GoPro users have been left to fend for themselves on how to upload and edit footage -- a must for GoPro users. Why wouldn't you want to show your Facebook friends your amazing ski jump?
With better media sharing tools, GoPro could turn itself into a media company. Users can share content to the GoPro network that streams on YouTube, Xbox One, and other set-top boxes.
In the past, GoPro has had a desktop tool for its users. However, it's considered clunky and hard to use.
Financial analysts at Cowen and Company believe GoPro still has a fighting chance going forward, but it needs to expand away from the niche market it was able to overtake years ago.
"We believe GPRO is a category creator, expanding from a core of action cam/sports enthusiasts to a larger consumer lifestyle capture market."
In the beginning GoPro didn't have this struggle because of its niche position in the market. Now that it needs to appeal to the broader market to generate sales, it also needs to incorporate software for the users that aren't so technically-inclined.
"In 2016, we are committed to delivering a breakthrough -- the breakthrough experience we have all been waiting for, a seamless offload, access, and edit solution across mobile, desktop, and platforms. It's against this commitment that you can judge our performance this year," Woodman said.
Any future hardware the company releases will "do a better job of connecting to smartphones and the cloud. Any advancements in software will be matched at the hardware level," Woodman says.
The new editing platform from GoPro is said to be designed to greatly increase ease of use and reduce editing time. It's expected later this year, along with a consumer drone in June and VR devices. A new HERO5 is expected later in 2016.
"We believe all of the above are critical to rekindle consumer buzz and widen interest in the category," Cowen and Company says.