GoPro shares fell 12 per cent impacted by the news Apple was granted a patent for an action camera, which suggested that the two consumer electronics companies might one day go into direct competition, as the Financial Times reports.
The threat of a new rival in the form of the world’s most valuable
company was complicated by a high number of investors taking a short
position in GoPro, predicting that its share price would fall, ahead of
the expiration next month of restrictions on its employees selling
stock.
The shares of GoPro have lost more than a fifth of their value since the beginning of the year, though still trading well above the price of its initial public offering (IPO) in June. The shares closed at $49.87 on Tuesday.
The company ranks among those with the highest portion of their stock on loan to short sellers, with more than 60 per cent of its float shorted, and the shares have been unusually volatile in the seven months since its initial public offering. On February 17, 5m new shares will become tradable after the expiry of a post-IPO lock-up period.
Apple is regularly granted patents on a range of products and inventions, many of which never make it to market, says FT. However, as it expands its accessories business into smartwatches and — with the acquisition of Beats — high-end headphones, some GoPro investors took fright at the iPhone maker’s patent for a “digital camera system having remote control”, when it was reported by news site Patently Apple on Tuesday.
In an interview with the Financial Times, Nick Woodman, GoPro’s chief executive, said that its rivals failed to appreciate the power of its brand. Although GoPro works to improve its own tools for managing and editing video, Apple already offers its own content management tools, including iPhoto and iMovie, which are bundled free with its Mac computers.
Apple's patent filing describes a waterproof camera that could use an underwater microphone or “hydrophone” to record sounds during scuba diving, for instance, as well as a facility to mount the portable device on bicycle handlebars or ski helmets.
It specifies aspects of GoPro’s Hero line of cameras which Apple believes could be improved upon, including a “lower profile” to reduce wind resistance and risk of damage from overhanging branches, a lower centre of gravity to minimise vibrations and better power management in the way it connects to a remote control, to conserve battery life.
GoPro has seen off several challenges from larger competitors in the past, including Sony.
But the action camera market continues to see new entrants, including
HTC’s RE, which the smartphone maker introduced last year.
