UPDATED 02:40 EDT / NOVEMBER 10 2016

NEWS

Bad karma: GoPro recalls all its drones, blaming power fault

Action camera maker GoPro Inc.’s effort to carve its own slice of the drone market has suffered a serious setback after the company was forced to recall its Karma range of drones.

The recall applies to every GoPro Karma drone sold, which means every single drone GoPro has ever sold, a surprisingly small total of only 2,500. According to a press release from the company, the recall was announced after it was discovered that in a small number of cases, Karma units lost power during operation.

On the bright side, GoPro claims that there were no related injuries or property damage caused by the fault. However, the recall does involve coordination with the U.S. Consumer Product Safety Commission and the Federal Aviation Administration, suggesting that although the fault sounds innocuous and hasn’t resulted in missing limbs or death, it is nonetheless a serious issue.

Credibility

GoPro first announced it was entering the drone market in November 2014 as a way of broadening their product offering at a time where growth in their once buoyant action outdoor camera business was starting to slow. The Karma was eventually launched in September this year to positive reviews, but its recall less than 2 months after its release is a serious blow to the company’s credibility.

Stock in the company took a battering following the announcement, with at least one analyst cutting the stock from neutral to long term buy.

As Hillary Lyons Equity Research Analyst Stephen Turner explains (via Barrons):

In our note dated November 7, 2016 we highlighted our doubts in management’s ability to execute and this solidifies our opinion. This is particularly upsetting given the company had previously delayed the product earlier in the year giving them extra time to launch a high quality product. With production issues of the HERO 5 Black already reducing our holiday outlook and now our expectation of no or highly limited Karma drone at retail locations we move to the sidelines on GPRO. We will look for management to meet stated goals while also executing for several quarters before we can again consider recommending shares of GPRO.

GoPro has not said when the Karma drone will return to retail outlets, saying only that they “plan to make Karma available once [the issue] has been resolved.”

Image credit: GoPro

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