Why iPhone Isn't Going to Replace the GoPro Camera

By Markets Fool.com

Image source: GoPro.

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One of the most commonly used cases against GoPro (NASDAQ: GPRO), and action cameras or devices from companies like Garmin (NASDAQ: GRMN) or Sony (NYSE: SNE)in general, is that they'll soon be replaced by devices most people have in their pocket. Why buy an action camera for $300 or $400 when you have a camera in your pocket already?

That's an easy question to ask if you work in an office in an urban center and you have hobbies like watching movies or going out to eat. You don't need an action camera to take selfies or pictures of your food and an Apple (NASDAQ: AAPL) iPhone will often do the job better than a GoPro ever could. But when you're taking video while skydiving, driving a race car, or skiing down a mountain, the idea of using an iPhone to capture content seems downright crazy. And that's why GoPro is in a stronger position than many people give it credit for.

GoPro is a different kind of company

What GoPro brings to the market is a rugged camera that's designed for use in applications where it may take a tumble or be splashed with mud. That's what a GoPro is for. And management understands that and is designing the company's products to exploit those advantages.

Image source: GoPro.

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The first phase of GoPro differentiating itself from a camera phone was building out the ecosystem of ways to attach a GoPro to yourself or a device. Ski helmets come with GoPro connectors, mounts are made for bicycles, and GoPro can even be attached to the outside of a race car. But new products are understanding the needs of customers as well.

When Karma Drone was released, it was the Karma Grip that really differentiated it from other drones. The detachable grip will allow users to take stabilized images with a GoPro while on the move. Even an iPhone with image stabilization won't take the same stable images if you're chasing your kids down a beach. GoPro is starting to understand where its heart of action sports can be used to bring images to consumers they couldn't (or wouldn't) take with the camera in their pocket.

An enviable position

GoPro isn't the only one that sees the opportunity in cameras that have utility beyond where you would use a smartphone. I mentioned that Garmin and Sony have introduced compelling products that in many ways are as good or better than GoPro.

But then you come back to the ecosystem that's become a key differentiator for GoPro. The ski helmet I recently bought had a GoPro mount, a go-cart I rode on vacation had a GoPro mount on it, and the first time I went skydiving, the instructor had GoPro mounts ready to go when I arrived. GoPro is the default camera and therefore it's the default ecosystem in action sports. That'll be a tough position for Garmin or Sony to crack.

GoPro does have to close the gap

Even with all of the positives GoPro brings to the table, it does have deficiencies. Getting data from a camera out to social media or to an editing app isn't as easy as it should be. With an iPhone, sharing is simply a click away; and with GoPro, there are multiple steps to be taken. But GoPro also knows that's its biggest weakness, so apps are quickly improving.

While software is currently a weakness, what shouldn't go overlooked is that GoPro is still the camera of choice for applications where you want to take a picture or video and don't want to smash your iPhone in the process. I don't see the iPhone replacing the GoPro for those applications anytime soon, which leaves the company in a better position than you might think.

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Travis Hoium owns shares of Apple and GoPro. The Motley Fool owns shares of and recommends Apple and GoPro. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.