“Don’t Hold Your Breath for Amazon Prime-Air Drone Delivery”

Amazon.com was profiled on 60 Minutes this past Sunday.  The video (shown below if you missed it) features a behind-the-scenes look at this amazing (albeit unprofitable) company, and an announcement by CEO Jeff Bezos that Amazon is developing flying robots to eventually deliver their packages.

The thought of flying robots is certainly cool in a science fiction sort-of-way, and made for a great 60 Minutes piece… but we should also realize that this is NOT going to happen anytime soon.

Kid Dynamite’s World is a blog I read regularly.  Kid’s take on Amazon’s news was spot-on, in my opinion.  You can read his entire blog entry on this subject here, but this excerpt was my favourite part:

“But watching Bezos’s drone demo, I didn’t even have 2 seconds of “oh man, this is a cool idea” thoughts before I blurted out to my wife: “This is moronic.   There is no way this is going to happen.”

Who is the target audience here?   It’s not feasible for big cities, and my first thought was “people will shoot these things down or steal them.”   Then you add in the 10 mile restraint, and it seems like the whole idea is more of a word-of-mouth advertising bit than a potential reality.    Bezos mentioned that “in urban areas, you could cover very significant portions of the population.”   I don’t get it.   Look – tell me how this is going to function in New York City – convince me.  No friggin’ way.   Tell me where it works – for the people living around the Amazon fulfillment centers?     In densely packed low-crime suburban neighborhoods that are also located within range of Amazon fulfillment centers?

To the Believers out there: convince me.

Remember how in many of the movies they make about “The Future” there are 3 dimensional highways with cars traveling on rails or air?   That isn’t happening in my lifetime, and I’m not holding my breath for Amazon Same Day Delivery Drones either.    I am pretty confident that I will buy my electricity from Amazon before I get a drone delivery from them.

To have 60 Minutes profile the story (on the opening weekend of the holiday shopping season, no less) was a phenomenal piece of free publicity, I’ll give Amazon that.

This was also further proof that established businesses will have to continually do better if they are to compete with Amazon, and the online retailer’s ever-broadening scope.   As money managers, our job is to remember all of this when evaluating your potential investments.

 

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