The Hero 7 is GoPro's hit

One of the only ways to do something right extreme is to find and become familiar with the limits of this action. For example, to become a world-class snowboarder who pulls a 20-foot corkscrew over half a tube of ice, you will inevitably fall on some of that ice.

GoPro started 2018 on the floor of this proverbial half-pipe, bruised and bloody. The company's title collapsed, it had just completed its second consecutive year operating at a loss, and GoPro acknowledged its defeat in the drone market by removing quadricopter Karma from store shelves. CEO Nick Woodman has announced a new series of layoffs – the fourth in recent years – and has begun to talk publicly about the possibility of an acquisition. He even hired JPMorgan to rule out the possibility. To top it off, GoPro's latest camera, the Hero 6, was not sold well enough to help the company cope with its dire predictions for the 2017 holiday season.

Nine months later, however, there is renewed optimism within GoPro's leadership. The bad drone Karma, the layoffs and the slaughter last year of the company's inflated camera range were all necessary gestures, it is said, for GoPro to reach its current goal. Hopefully, they'll end up like those failed halfpipe attempts and will be quickly forgotten when the company has experienced one of its best tours in years: the new range of Hero 7 cameras.

Woodman has spent the last year telling Wall Street, the press, and anyone else that GoPro's 2018 product announcement is about giving customers a Cold Stone Creamery-like choice: "good, better, better." "

This promise materialized in the form of three new cameras announced on Thursday: the Hero 7 White, the Hero 7 Silver and the Hero 7 Black. The cameras cost $ 199, $ 299 and $ 399, respectively, and offer different levels of performance. And although GoPro has sold some of its best cameras at these price levels in the past, the company sometimes had to offer discounts for doing so. The new range was designed to be sold at these prices – which is crucial for the company to become profitable again, said Woodman. The edge in a recent interview in his office at GoPro headquarters in San Mateo, California.

The Hero 7 Black is the most familiar of the group, because it reproduces almost exactly the rubber, black and waterproof design of its predecessors (the Hero 5 and the Hero 6 Black). This is the second camera to use GoPro's custom GP1 processor, which the company used for the first time last year in the Hero 6 Black after being shared with long-time supplier Ambarella. The extra year of working with the processor – plus an additional dash of unspecified RAM – has led to a number of new features in the Hero 7 Black, including live streaming, an accelerated feature like HDR Smart Photo Mode , and the head of the poster: a remarkable digital stabilization algorithm.

The other two cameras, White and Silver, are not as powerful, but feature a more refined version of the Hero 5 / Hero 6 design. They almost make the Hero 7 Black look like an almost final prototype; their rounded edges are more rounded and the bumps of their lenses are less severe. There is always a touch screen at the back of each of these cameras, but GoPro has dropped the small LCD on the front which usually displays information on shooting modes, range and the available space on the memory card.

Photo: GoPro

Internally, they are powered by a less powerful processor – GoPro will not say who did it at the moment – and therefore they have more limited capabilities. The Hero 7 Silver shoot images in 4K, but it does not have super fast idle capacity, for example, while the video resolution of Hero 7 White is higher than 1080p.

These three cameras (plus 360-degree fusion) are the only cameras that GoPro will sell in the foreseeable future and, according to Woodman, the company even plans to simplify its accessories universe to reduce high operating costs and confusion. customers.

This could even mean the abandonment of the Karma Grip, the portable stabilization accessory announced with the GoPro drone in 2016. The Grip was originally placed in the Karma drone ecosystem, a way to get the same smooth cinematic film the promised company could be captured in the air. GoPro has since sold it separately, promising that it would make "the ordinary extraordinary".

But in the meantime, GoPro was also developing sophisticated digital image stabilization technology and integrating it with the company's cameras. The new version is called Hypersmooth, and its evolution is spectacular. The images filmed on the Hero 7 Black with Hypersmooth have an ethereal quality, and even the freehand shots – without brackets or props – seem to have been captured with the aid of a stabilizing equipment. I thought it was true if I walked down the street or chased my dog ​​into the park. Take the time to mount the Hero 7 Black on a bike or helmet, and the benefits are even greater.

Hypersmooth is available in almost any shooting mode, and where it's not, the camera will return to the Hero 6 Black stabilization levels, which is impressive because there are no moving parts to inside. . The functionality reduces even the roller shutter, a problem more difficult to solve, and a problem that hit the best GoPros of years spent in situations of strong vibrations.

For these reasons, Woodman argues that Hypersmooth is a big step forward.

"Killing this beast is really serious," he says behind his desk, wearing sandals, a graphic T-shirt and blue jeans with a GoPro belt buckle. By maximizing frame rates and resolutions, many users, he admits, but everyone benefits. "As soon as we produced the first HD Hero [camera]we tried to do it because we recognized that the next step [wide-angle] "In the first place," he adds, "This is the biggest launch we've had since 2012 when we launched the Hero 3 cameras."

GoPro is so sure of the value of Hypersmooth that it is actively promoting, in marketing materials, the fact that the camera essentially obsolete the $ 299 Karma Grip. It's not often that you see a company adding a feature to a product that puts another in danger, but Woodman says it was an obvious choice.

"There are still limited use cases for a gimbal, so it makes sense that we sell and still support Karma Grip," Woodman said. "But we are going to pay particular attention to sales growth, because if our technical development efforts are better served and our customers are better served, we are redirecting our development efforts to more and more integrated capabilities. that's what we will do.

According to Woodman, a recovery in profitability could open the door to more products. If you look at the number of products abandoned in the last few years, there is certainly no shortage of ideas at GoPro. The problem then, he says, was really the execution.

Its vice president of design, Danny Coster, who was hired by Apple's industrial design team in 2016, was one of the leaders in the effort of consistency. GoPro refused to make Coster available for an interview, but Pablo Lema vice president of product experience and users, the influence of Coster really begins to be felt – thanks to the nature of the cycles of product design over several years – with the Hero 7 White and Silver.

"What it brings us is the seriousness of the nuances of product design," says Lema. "In the past, we would have taken things for granted like the rays, and how that feels in the hand, and it's really nice to have an immeasurable experience on how we end up designing the products. "

Such respect for Coster is not hard to find at GoPro, where it is treated as the company's own Jony Ive – because GoPro has refused to make it available for an interview. (During his two years at GoPro, he mostly appeared in only a few videos produced by companies.) But Lema's argument is true, especially with the Hero 7 Silver and White cameras. The two cameras look alike and feel just different enough – and most importantly, New it would not be surprising that customers who are not price-sensitive choose one over the Hero 7 Black. They have a clearer idea of ​​the future of GoPro's design.

There will be trade-offs, but White and Silver offer budget-conscious buyers two solid options. On paper, the Hero 7 Silver compares favorably to Hero 6 Black, thanks to built-in GPS, extended dynamic range shots and the ability to take videos with a resolution of up to 4K to 30 frames per second. Silver and Hero 7 White are both waterproof, have voice control and can automatically save images to the GoPro cloud service over Wi-Fi. They do not have Hypersmooth, but they have a stabilization at the Hero 6 Black level.

But the Hero 7 Black is the standard bearer. This is the camera that athletes, pros and prosumers will buy, which means it will also be the most visible. And Woodman can not contain his enthusiasm for Hypersmooth. "[It] establishes a new bar, not just for GoPro image quality, but for the entire digital imaging industry, "he says. "I'm comfortable to say that's the biggest advance of GoPro since high definition."

The foundation of most new features of the Hero 7 Black – including Hypersmooth – is the GP1, the company's custom processor.

The transition to GP1 marks the departure of GoPro, which had already used Ambarella processors to power its cameras. The GP1 was designed by GoPro and manufactured by a company called Socionext. Although the company credits some of Hero 6 Black's flagship features to the custom processor, Woodman says the Hero 7 Black is helping to realize more potential.

This means faster performance throughout the camera, but also new features such as the time-lapse function called "time warp" which uses Hypersmooth stabilization to create a video that looks like a sequence taken with the application Hyperlapse of Instagram. There's also a new, smarter HDR photo mode that automatically adjusts settings based on the type of scene the camera is aimed at, much like Google's Pixel phones or Apple's new iPhones.

But the real value of GP1 lies, according to Woodman, in what it means for the company. "Owning the bulk of the stack means we can move, invent and innovate faster than we could when we depend more on a third-party vendor for our processor," he says.

The problem of using another company for a component as crucial as the processor was multiple, he says. First, as a company like Ambarella manufactures chips used by many companies, there is only one motivation to customize a chip to meet the specific needs of each customer. Second, if GoPro was able to influence Ambarella to include some ideas or breakthroughs, these would now be available to any competitor wishing to buy the chip.

"Others have benefited from our development and we could not do much to change that or restrict access to some of our innovations," he says. "If some of the things we wanted to do simply did not fit the roadmap of what our supplier wanted, we could not do it, or we certainly could not do it so quickly, whereas now, when we decide to go do something and our teams are aligned, it is done and is done much faster. "

In the wake of the company's strong software surge in recent years, which was largely based on a few strategic acquisitions, the development of GP1 was led by a small GoPro team acquired from the imaging company DxO .

"It's the team that specifies what we want in the next-generation chip, so that we can really control our destiny. If we invent a way to do better image processing, we can now include it in our cameras without sharing it with the rest of the world, "says Sandor Barna, GoPro's technical director.

"They have a nice balance. They know the types of products we want to make and [have] just an intelligence of the science of the raw image that is photons and pixels and algorithms, "adds Lema.

When Woodman talks about the GP1 chip, his brand sense is overtaken, or even surpassed, by an obvious sense of relief. He is very proud of the society he has built and he can talk for hours about each one of them. But it is clear that he believes GoPro's bespoke processor has bought the company a lot of room for maneuver.

"The hardware is the platform on which the software is dancing its magic dance, right? We need to have the processing power to allow our software engineers to invent the future through their algorithm development, "he explains.

Another key to mastering an extreme sport is simply figuring out what you do not do. And that's something that GoPro's leadership admits society has learned at its expense. By listening to them talk about what will follow, it is clear that the goal is not just to make the right products, but to find the right customers to click on "buy".

"Nick and I are debating this issue all the time, there is always a hint of something that a customer does not know what he wants, and we have to bring it to him," says Lema. "But you can not just do that because you're going bad

It's one of GoPro's toughest lessons, says Lema, the Karma drone being one of the biggest failures. First teased in 2015, Karma was delayed, then announced, and almost immediately recalled – a news that was announced on the night of the 2016 presidential election. The drone was put on sale again a few months later, but when that was the case, GoPro had a hard time comparing (and taking market share) the rapidly evolving range of the Chinese DJI drone manufacturer.

Lema, whom GoPro hired from 3D Robotics (the only other DJI American competitor at the time) to launch the Karma project, said that killing the company's drones division was "unfortunately the right business decision."

Woodman said that Karma had been abandoned largely because the margins on the product were too thin, although Lema says GoPro could have generated enough profits on the drone. But he admits that it probably would not have happened before the third version. "And as we began to see things we wanted to fix in our core camera business, funding for such an initiative was too difficult," he says. It was particularly unfortunate because the second version of Karma "was going to be very, very cool," he says. "And [DJI’s] Mavic 2 is very very similar.

The Hero Session – a tiny cube of a camera released in 2015 – was another dud that, again, had a lot to do with the company's misinterpretation of the market.

GoPro touted the Session's small size and one-button design as proof that it was intended to make its cameras both easier to use and less intrusive, two common complaints with earlier products. But the sales of the original session, as well as his successor, have never taken off. GoPro had to reduce the price of the first session by $ 200 and the product was not refreshed when the Hero 6 Black arrived.

Although it seemed like an easy-to-use camera for GoPro people, Barna said it was more of a "simple for an experienced user" method.

"Give this camera to an entry-level person who has no experience with GoPro, half of the people do not even realize it's a camera," he says.

"You really have to be honest with yourself: if someone tells you that something is wrong in their experience with your product, that's true," Lema says. "You should listen to it. And it's up to us to make it a better experience. "

Failures like these are endangered, according to Woodman.

"We started to realize that we were building our version of GoPro, not the client version," he says. To solve this problem, GoPro has spent the last two years focusing more on listening to customers, while seeking to create new ones (especially in foreign markets). The company has set up an internal consumer information team that collects and studies data, and now has an infrastructure that explains how users are using – and more importantly, how they do not use GoPro cameras. .

This new feedback loop has led to things like the pricing structure of the Hero 7 and the design of lower level options. He also informed the user interface of more and more simplified, as well as new features such as "short clips", where the user can specify in advance that he does not wish than take videos of 15 or 30 seconds easier to share on Instagram or others. social media.

"Before making an announcement on the Super Bowl and saying" everyone should buy this camera, it's for everyone, it's a GoPro, it's super easy to use ". we make sure that we give the right experience to someone who is going to spend a lot of money to buy a device from us. "

Despite all its difficulties, one thing has not changed for GoPro: it still sells Tonnes and tonnes At the lowest points of the company in recent years, it has sold more than 4 million GoPros to people around the world. According to Woodman, it is already expected to recover more than $ 5 million this year, and a successful launch of Hero 7 and the holiday season could further increase this figure.

But GoPro has had a profitable quarter for nearly three years and Wall Street is not happy. It is tempting to think that only athletes or customers or employees care about the success of GoPro. But it has been a publicly traded company for four years now, so there is constant pressure to please shareholders. These shareholders want the value of their GoPro shares to increase, but since 2015, they have almost exclusively done the opposite.

"They have really gained credibility in recent years, so expectations have been rather low," says Alicia Reese, an analyst with Wedbush Securities. "They've been around long enough, they should generate a profit. This is what investors are looking for.

Yuuji Anderson, an analyst at Morgan Stanley, recently said that he was "skeptical" that GoPro could include enough functional enhancements in its new cameras to not only meet the demand but also achieve the growth needed to restore the confidence in the company's activities. This feeling is widely shared – most analysts are currently evaluating the company's shares in "waiting" or "selling".

This turbulent relationship is one of the reasons why there was so much buzz about a potential acquisition in the first half of 2018 – including reports that Chinese consumer technology company Xiaomi was interested in buying .

On the eve of the launch of Hero 7, Woodman gives the impression that any chance of selling has been filed.

"When I made this statement months ago, I felt that as a founder I had to say that I was not holding back the company and that I was not firm against this idea. If there is an opportunity to grow our audience by aligning with a company that has helped us achieve our goals, I would be willing to think about it, "he says. "But our goal of the year has been and continues to be to make our business profitable.

Woodman's role as founder and CEO means that a big decision, such as the sale of the company, is totally subject to his whims because he has so much control over the authors, says Reese.

"It's her baby," she says. "After a few years of experience, it seems to me that maybe it was difficult to get by, but he could have been out of breath. But things start again and if things go as planned in the back half [of 2018] I think he will not have the desire to sell the company. "

Despite GoPro's difficulties, there is one thing that is truly enviable about the position in which it operates: it essentially does not have any direct competition. The company's biggest competitor in the sector was Sony, but the Japanese electronics giant has not put a camera in action for years. The much cheaper options that seem to compete on paper – like Xiaomi's Yi range – have not been able to reduce GoPro's market share.

The biggest competitive threat to society may have always been the rapid evolution of smartphone cameras. But even if these have improved and the phones themselves have become waterproof, there are still many situations where you prefer to let a GoPro take control.

Woodman admits that the company has acted "scared" in recent years as it struggles to figure out what's wrong, and "shrinks a bit" as a result. But like the snowboarder at the bottom of the half-pipe, Woodman thinks that GoPro finally figured out what's wrong. He found the limits. Now it's time to get up, climb the hill and try again. If GoPro still needs a hero, his new cameras – and especially his new flagship product – might be the answer.

"It's far from the best GoPros we've ever achieved, by far the most important moment in the company's history," he says. "The world likes to kill you when you're on top. But fortunately, the world also loves a story back. "