GoPro Inc. shares took a nosedive after Apple Inc. acquired a massive portfolio of patents from the United States Patent and Trademark Office, including one for a remote-controlled camera system.
Shares fell by $6.91 or 12.17 percent before reaching a low of $49.81.
Now I know what some people might be thinking: “$6.91? That’s it? Pshh! I make more than that in an hour.” Well, $6.91 represents a lot of money on Wall Street, where stocks fluctuate a few cents a day.
Investors are concerned that the patent will allow Apple to create an action camera similar to GoPro, but with a few improvements.
And when I say a “few,” I mean the perfect action camera. Improvements such as stabilization technology, wrist-worn remote control system, and underwater capabilities (like taking pictures and recording sound underwater).
It’s easy to see why GoPro should be worried, but does this spell the end of GoPro? Not necessarily.
Every year, Apple receives thousands of patents that almost never lead to products for the average consumer. If the tech giants considered patenting a camera to rival GoPro’s, they would’ve created their own out of Cupertino.
The question plaguing the thoughts of GoPro executives: “Will Apple run GoPro into the ground?” To which Brian Balke, SMU student and roommate, answered succinctly, “No.” A powerful, albeit lacking pith, response.
While Apple may not release a camera to compete with GoPro, other companies like Sony have unveiled new high-resolution cameras to chip away at GoPro’s market share.
GoPro controls such a large portion of power in the market for action cameras that a new supplier is unlikely to put them out of business.
Apple inadvertently demonstrated their dominance in the tech world. By simply acquiring a patent for a remote controlled camera, GoPro’s shares plummeted.
If that’s not market power then I don’t what is.
And its not hard to see why investors would be eager to sell GoPro shares after the acquisition. Apple sold more than 270 million units of their products in 2014 alone. Action cameras similar to GoPro’s could easily be one of them.
