Drones Falling from the Sky; GoPro Inc. Pulls Karma Line of Drone Cameras

Product Safety Recall; GoPro Inc. Pulls Karma Line

Consumers are being asked to return their Karma, a line of GoPro Inc. drones that have been recalled after several allegedly lost power during flight and violently crashed to the ground. After a number of manufacturing problems caused GoPro’s sales to plummet, the company looked to their Karma drone and HERO5 camera to turn around their fortunes. Unfortunately, GoPro was forced to recall all of the 2,500 drones sold since Karma launched at the end of October. The company, down 40% last quarter, has since pulled all of their drones off the shelves at Best Buy retailers and online, but they have not announced why they can lose power and turn into potentially dangerous projectiles.

GoPro Inc., still reeling from a string of disappointing launches, including the HERO5, their new flagship camera, is now selling for around $10 a share. This is down from over $70 a share in November 2014 and around $25 one year ago, which was close to their $24 IPO in June 2014. The drone business was not projected to make up more than 10% of GoPro’s business, but the new product was a result of millions spent in research and development—up to 14% of sales from less than 5% in 2011.

But as of now GoPro does not even know when their drones will be available for purchase again. First they must identify why their drones lost power and then they have to rebuild their inventory. The California electronics company, founded in 2002 by Nick Woodman, said they were recalling the drones—that were supposed to be released over the summer—despite the “very small number” that lost power and free fell back to earth. A few of the alleged incidents have been uploaded to YouTube, but GoPro said that to date the $800 Karma drones have not led to any reported injuries.

GoPro & Safety

“Safety is our top priority,” said Woodman, GoPro’s CEO. “We have moved quickly to recall all units of Karma and provide a full refund while we investigate the issue. We are working in close coordination with both the U.S. Consumer Product Safety Commission (CPSC) and Federal Aviation Administration. We are very sorry to have inconvenienced our customers and we are taking every step to make the return and refund process as easy as possible.”

The CPSC has asked all GoPro Inc. Karma owners to immediately power down and return their quadcopter drones for a complete refund. GoPro said that they cannot provide a replacement and only refunds will be offered. Some Karma drones were sold in a package with the HERO5 Black camera and the Karma Grip, which are not being recalled, but must be returned if they were purchased in a bundle. GoPro also said that once the return and refund are completed, each affected owner will receive a complimentary HERO5 Black camera.

To return your Karma drone and receive a refund visit: https://gopro.com/2016karmareturn