GoPro Inc Betting Mobile Apps Are a Key to the Future

By Travis Hoium Markets

If GoPro Inc (NASDAQ: GPRO) is going to survive in the tumultuous camera market, it's going to have to find a way to make itself both more valuable and more sticky to customers. And one way it's looking to do that is through its mobile applications Capture and Quik.

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Capture is the GoPro app that pulls in content from GoPro cameras, and for customers who subscribe to GoPro Plus or have a microSD card reader, it works fine. But it's fairly limited in its use cases, and so the Quik app is quickly becoming the go-to app for GoPro. Here's how the camera maker is pushing the app to GoPro devices and elsewhere.

Spherical photo from GoPro. Image source: GoPro.

Quik becomes key to the GoPro experience

Quik is part of a suite of apps the company acquired in early 2016 to make editing and sharing GoPro content easier. With a few clicks the app will take image and video content, and turn it into an edited video that can be shared or saved to a variety of social media apps. It's one of the simplest ways to create this kind of edited content, so it's a good solution for GoPro to have in its portfolio.

But GoPro has its sights on this being more than just an app for GoPro content. The company announced a partnership with Huawei that will make the Quik app the primary integrated video-editing app on Huawei P10 and Huawei P10 Plus smartphones.

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Huawei may not be a household name in the U.S., but it's a big player in the mobile-phone business. According to IDC, the company held 9.3% of the global smartphone market share in the third quarter of 2016, up from 8.2% in the fourth quarter of 2015.

We don't know yet if GoPro will receive financial compensation for the app, but it's likely the Huawei partnership will just be a way to get GoPro's technology on more devices. It may also give the company more publicity in international markets, where it has never had a very large presence.

Apps have always been a weakness

The day after the Huawei deal was announced, GoPro updated its Capture and Quik apps, and announced that GoPro Plus is available in some European countries, with more markets to follow in the coming weeks. Improving and expanding the video-editing products is key because it will help drive camera sales.

GoPro's weakness has long been that it has been difficult to take content from a GoPro camera to social media, or other content-sharing platforms. The Capture and Quik apps are key to making GoPro cameras easier to use, and thus their upgrades and the company's expanded partnerships shouldn't be taken lightly. Without them, GoPro could be passed by other action cameras or devices, like the iPhone, that make video capturing and sharing easy (although GoPro has the advantage of being able to withstand rough situations that might harm another device).

What GoPro has to do now is translate the app improvements into sales. 2016 was a recovery year for the company, and if both apps and connectivity improve in 2017, we could see another wave of sales improvement. These apps are an area GoPro can build upon and may be key to the company's success in the future.

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Travis Hoium owns shares of GoPro. The Motley Fool owns shares of and recommends GoPro. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. The Motley Fool has a disclosure policy.