For year GoPro has been synonymous with action cameras but poor Christmas sales and rising competition could have knocked it off its perch.

The company’s forecast revenue of $435 million for the fourth quarter was well down on its $512 million market predictions. This led to a seven per cent reduction in staff that saw its shares tumble 28 per cent overnight. The difference in figures was explained by a poor Christmas period.

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Releasing the staff will lead to a further $5-10 million “restructuring costs” most of which will be severance costs.

GoPro’s yearly share prices (Google)

While GoPro used to have the run of the market (they enjoyed a 57 per cent share globally in 2014)  they are now facing stiff competition from the likes of Sony, Garmin and EE, and with new players like Nikon entering the market, this is a trend that could continue.

The Silicon Valley based company also believes its revenue was hit by a decision to cut the price of the Hero 4 in December. In a statement it said: “fourth quarter revenue includes a $21 million reduction for price protection related charges resulting from the HERO4 Session repricing.”

In fact, the Hero 4 has been a bit of a disaster for the company all-round. In a statement released in October GoPro CEO Nicholas Woodman admitted that that camera was “mispriced” and not properly marketed when it emerged for $399 (£280) in September 2014.

However, all is not lost for GoPro. In 2015 there was no new flagship camera launched (just the shrunk down Hero 4 Session) but 2016 will see the launch of the Hero 5, supposed to be capable of shooting in 4k at 60fps, that GoPro is hoping will re-establish it as the market leader. Experts are also predicting that moving into virtual reality and drones could help GoPro recover.