~ Auto Buzz ~: Xiaomi Considering GoPro Bid, Worried About Overpaying: Report

Friday, 13 April 2018

Xiaomi Considering GoPro Bid, Worried About Overpaying: Report



Chinese electronics startup Xiaomi is mulling a bid for San Mateo, California-based action camera manufacturer GoPro, The Information reported Thursday, citing a source with knowledge of the deliberations. Xiaomi still hasn’t made any final decisions on the matter and is worried about overpaying for the struggling firm, a scenario that it’s adamant to avoid, according to the same insider. The Beijing-based OEM may be interested in an acquisition as a method of diversifying its already comprehensive business ahead of a widely reported IPO expected to take place in the second half of the year. GoPro is presently struggling across the board, having seen its revenue decline by hundreds of millions of dollars in recent years. While it reported a turnover of $1.6 billion in 2015, the company’s 2017 revenue amounted to $1.17 billion and is predicted to continue declining moving forward.

Besides a significant increase in a number of international rivals looking to undercut the company’s products with aggressively priced offerings, GoPro is also understood to be struggling due to the fact that action cameras aren’t the type of gadgets that consumers traditionally upgrade on a yearly or biannual basis like smartphones. Industry watchers are now drawing parallels between GoPro and Palm, a Sunnyvale-based PDA manufacturer that struggled in a similar manner before being sold to HP in 2010 for $1 billion, a price that GoPro may also be able to fetch if it’s sold in the near future. The action camera maker’s current market capitalization amounts to some $700 million, 36-percent down year-on-year.

Unnamed bankers pitched a GoPro acquisition to Chinese drone company DJI in recent times but the firm declined the offer as it saw no value in it, another industry insider claims. Regardless of whether GoPro ends up being approached by Xiaomi, a private equity firm, or another entity, the overall lack of growth it can count on is unlikely to push its sale at north of $1 billion. The firm closed down its failed drone business in January and is still struggling to diversify, with its action cameras remaining its only truly successful product category. The latest major offerings from the company were announced last September in the form of the HERO6 Black and Fusion cameras.

The post Xiaomi Considering GoPro Bid, Worried About Overpaying: Report appeared first on AndroidHeadlines.com |.


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