In a press release on Wednesday, GoPro Inc (NASDAQ: GPRO ) announced plans to relaunch its Karma drone later this year. The company says it is still finishing testing on getting the drone back in flying space, and it will share more information about the "global relaunch" of the Karma in early February.
On Wednesday, GPRO said it will resume sales of its Karma drone at some time this year. After the announcement, shares of the company changed just a little in after-hours trading.
GoPro's Mechanical Issue
The Karma was originally released in September 2016; however, the $799 drone was recalled swiftly just weeks after it went on sale in October. As for the reason for the recall, some of the 2,500 units sold were not working well; they were falling out of the sky. GoPro did not offer replacements, but it did issue refunds. At that time, GPRO did not say whether the drone would return to the market.
At CES, in addition to announcing that the Karma drone is actually not dead, the company said the power loss was due to a mechanical issue related to the drone's battery.
The Success of Karma Drone Very Important for GPRO
For GoPro, the recall of the Karma drone was just a rotten cherry on top of an already bad year. GPRO stock declined throughout the year. In addition, three weeks after issuing the Karma recall, the drone maker laid off 15% of its staff - its second round of layoffs last year.
The Karma drone is the main component of GoPro's plan to diversify beyond action cameras. By launching the $799 drone, GoPro intended to build out its base of products. Traditionally, its products have been aimed at base jumpers, surfers and other adventurers. Relaunching the device is an essential step as the company attempts to rebound from a challenging year marked by lowered sales expectations, missed deadlines and production delays.
Apart from the relaunch of the Karma, GPRO also announced new software updates and other capabilities at CES, including enabling its Hero 5 action camera to upload footage to the cloud automatically.
On Thursday, GPRO stock closed up 3.66% at $9.35. In 2016, the stock was down almost 50%, while in the last month, it is down more than 7%.
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