Amazon Needs Drones Because Otherwise Drones Could Kill Amazon

Moneybox
A blog about business and economics.
Dec. 1 2013 9:03 PM

Drones Could Be Amazon's Undoing     

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If anyone gets in our way, we'll drop tennis rackets on them from the sky.

Photo by Frank Micelotta/Getty Images for Amazon.com

Tonight on 60 Minutes, Amazon CEO Jeff Bezos announced rather hazily that the company is working on trying to hone unmanned aerial vehicles as a last-mile delivery solution that could make ultra-fast same-day delivery a reality. There's no real timeline attached to this vision, but there is a snazzy video. Check it out:

On a business level, I think the interesting thing here is not so much the opportunity for Amazon as the threat. Suppose some robotics firm somewhere develops quadrotor drones that can reliably execute parcel delivery missions over the relevant range for a metropolitan area, and the product becomes broadly commercially available. Amazon would be facing a pretty major disaster. Suddenly every Walmart and Target and Macy's in America would be equipped with a small fleet of drones, and all the hard work Amazon's done over the past 15 years to be the leader in online ordering and fulfillment would be for naught.

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America's brick and mortar retailers are currently desperately scrambling to make something like this happen, but they're hampered by their reliance on human delivery. The question is whether "good enough" drones will be available before Amazon manages to put all these companies out of business.

Unless Amazon itself can be the company that develops the drones.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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