Vacationing across Australia and Indonesia, a young surfer found himself struggling to figure out how to take decent selfie of himself while on his board. Taking a 35mm camera and strapping it onto his hand – via a rubber band no less – he quickly discovered that quality and practicality was lacking, but the idea merited exploring. Nick Woodman had given birth to GoPro.
Vans to trade shows, and hard work to hustle, GoPro started going viral, finding a market replacing the point and shoot camera. Smartphones, lead by Apple's camera quality, were absorbing the pocket camera market. Canon and Nikon countered, pushing higher-end pro-sumer and HDSLR cameras. GoPro had found a solid and vacant space, going public in June of 2014. Would GoPro strike Wall Street gold as it had the quality selfie video market? On day one, GoPro closed over $31 a share. Fast forward to today and GPRO continues its meteoric climb, now over $62 a share on swelling sales. Where will it end? Perhaps in Cupertino.
GoPro may be a one-trick pony, but Apple saw no issues in scooping up the singular Beats Electronics for $3 billion. Beats' sprawling popularity and margins were seen as very attractive to Apple's overall customer base and their own financial well being.
With a market cap heading towards $8 billion, a GoPro acquisition by Apple would represent their largest acquisition in history, but could easily pass board and shareholder approval. Apple now holds over $200 billion in cash and other liquid assets. Financially, a buyout of GoPro is easy, but perhaps an even easier question for Apple to answer is why they should purchase Woodman's brain child.
GoPro isn't sitting still. The company recently acquired a virtual reality and sci-fi video editing fx company, adding to the abilities of the GoPro ecosystem. That's right, ecosystem. GoPro may be content to play as a niche provider in a market space they all but created, but that niche is exploding in world-wide sales. Niche, yes. Small? No. Woodman is a young, eccentric, yet balanced visionary. The GoPro customer is young, trendy, and are evangelists for the technology.
Whether it is the balance sheet, growth, quality product, CEO, segment domination or corporate culture, GoPro parallels a young Apple in an amazingly wide range of areas. Would Apple want to see GoPro fall into the hands of Google, Amazon, FaceBook or even Microsoft? Probably not. GoPro could add value to Apple's competition, but it could do even more so with an acquisition from Apple. Integrating GoPro's optical technologies into iPhone, and iPhone technologies into GoPro devices, coupled with Apple's amazing marketing and strong distribution channel, topped off with best-in-class engineering, would continue to keep Apple youthful. GoPro has all the pieces Apple should own, leverage and integrate. At $8 billion or less, GoPro is an absolute steal, if not no-brainer for Tim Cook and company.
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