(Source: Wall Street Cheat Sheet)
It’s no secret that Amazon is serious about delivery drones. On its website, the company predicts, “One day, Prime Air vehicles will be as normal as seeing mail trucks on the road today,” and it also boasts, “From a technology point of view, we’ll be ready to put Prime Air into service as soon as the necessary regulations are in place.” The timeline for that? Soon, “as early as sometime in 2015,” thanks in large part to the encouragement of Amazon itself.
That Amazon is exploring the idea of delivery drones is at once unexpected and ridiculous. When the company announced in 2013 that it would be testing drones, many in the media derided the decision. Wired, for example, said, “The truth is that no one who buys discounted merchandise on Amazon today will have it delivered by drone, and such deliveries won’t happen for years — if they happen at all.” At the time, it seemed impossible that drone delivery would make any economic sense, especially for a company already operating on a thin margin. The technological and regulatory hurdles were simply thought to be too great.
Moreover, as Facebook Director of Product Sam Lessin said in response to the announcement: “Drones (and self driving cars) are the key to the ‘sharing’ economy where people don’t have to ‘own’ anything anymore. They can just request things when they need them, get them instantly, and return them when they are done.” Wired argues that this makes drones somewhat antithetical to Amazon’s existing “monolith” model.
But Amazon CEO Jeff Bezos appears to be committed to drones, regardless of the obstacles. In his 2013 letter to shareholders, he said, “The Prime Air team is already flight testing our 5th and 6th generation aerial vehicles, and we
are in the design phase on generations 7 and 8.”