How Important Is GoPro For Ambarella?

Ambarella Inc AMBA could be entering uncertain waters, as the hi-def camera maker GoPro Inc GPRO considers taking on a new supplier.

GoPro is considering adding QUALCOMM, Inc. QCOM as a supplier, a source told Benzinga.

As recently as November 2016, Ambarella's revenue share from component sales to GoPro has been estimated to be as high as 30–32 percent, according to BlueFin Research Partners analyst John Donovan's estimates.

This figure was forecast in a December note from Stifel analyst Kevin Cassidy to reach 5 percent in the company’s 2018 fiscal year, which it’s entering now, down from a previous estimate of 10 percent.

A New Partner For GoPro

The question of which company GoPro will use as their primary imaging supplier going forward comes as the company is leaving a turbulent 2016 behind. GoPro founder Nick Woodman described the company’s 2016 as “rocky” during a press conference at CES last week, after a recall of the Karma drone and production issues with the Hero 5 camera, according to USA Today. At the same time, Woodman expressed optimism about the camera maker’s future.

“Consumer demand is still strong for GoPro,” Woodman was quoted as saying.

Ambarella's Future

On a more bullish note, Donovan said in an earlier September report that Ambarella is diversifying its business, working with some of GoPro's competitors in the action and drone camera markets.

Ambarella’s imaging components are used in applications such as security cameras, sports cameras, wearable and flying cameras, and automotive video processing, according to the company.