The video is all the buzz today. There are only a few problems with this concept.
First has to do with security. If you are responsible for safeguarding oh, say, the White House from terrorists, how are you supposed to know which commercial drones are carrying packages from Amazon and which ones are carrying high explosives or worse?
Second has to do with cost. Can it really be cost-effective to fly one Nine West Zip Around Wallet ($27.99 right now) by drone from one of Amazon’s hundred warehouses to someone’s front door? Will the shipping stay at $2.95? Given the volume of packages that Amazon ships, how many drones will be needed? Tens of thousands? Hundreds of thousands?
And these won’t be any old drones. Drones flying over the wilds of Pakistan sniffing for Taliban aren’t that picky where they drop a Hellfire missile. The house, the driveway, the front yard . . . as long as they get the job done.
Air Bezos will have to be drones that are able to pick out a house that may only make one order a year to Amazon. And then can make a delivery without dropping the package on someone’s head or the windshield of a car in the driveway. Or in a snow bank.
That is one special, expensive drone with a really nice guidance system and an easy-going insurance agent. Because, the way Bezos described it, there won’t be a human with a joy stick bringing it to the front door. These things will have to do that by themselves.
Drones obviously have some tremendous applications. Lots of industries - such as agriculture and energy - want to use drones to get critical real-time information. Certifying new and affordable drones is going to be a major job for the Federal Aviation Administration over the next decade. Not to mention regulations.
Amazon may get clearance to do some, uh, pilotless projects. But it still seems much cheaper and reliable to have all-electric or natural gas-powered vehicles batching truckloads of deliveries to multiple consumers rather than one drone, one iPad.
One more thing. Despite the fact that its stock has been soaring, Amazon has a tendency to lose money. One analyst put it this way in a recent New York Times story:
“Amazon is the teacher’s pet of Wall Street,” said Sucharita Mulpuru, an analyst with Forrester Research. “There is no other company in the entire world that has the consistently abominable rate of profitability they do and yet has the stratospheric valuation they do.”
That was a problem that was lightly glided over on 60 Minutes last night.