Amazon Developing Drones for Deliveries

December 2, 2013 Leave a comment

Amazon Developing Drones for Deliveries

GREG BENSINGER

Dec. 2, 2013 12:51 a.m. ET

Amazon.com Inc. AMZN +1.79% Chief Executive Jeff Bezos said the online retailer is developing pilotless flying vehicles he calls “octocopters” that can deliver packages within a half-hour of customers placing an order. Mr. Bezos showed Charlie Rose an early version of the drone in development on an episode of the CBS news program “60 Minutes” aired Sunday evening.He said it was possible Amazon could introduce the drones within four to five years, depending in part on Federal Aviation Administration approvals.

“I know this looks like science fiction. It’s not,” Mr. Bezos said, according to a transcript of the program sent by “60 Minutes.”

Amazon has been working to cut delivery time through warehouse-equipment efficiencies and by building more of them near urban centers. The Seattle retailer has drawn millions of customers to its $79-a-year shipping Prime program, which promises unlimited two-day shipping.

Mr. Bezos said the drones could carry packages weighing up to 5 pounds, which make up 86% of the company’s deliveries, according to the transcript.

“It could be a ten-mile radius from a fulfillment center,” said Mr. Bezos. “So, in urban areas, you could actually cover very significant portions of the population.”

Much about the project remains to be seen, however. Amazon will have to contend with cost, noise and safety issues, as well as privacy concerns surrounding vehicles making apparent Amazon deliveries.

“I don’t want anybody to think this is just around the corner,” said Mr. Bezos. “This is all an R&D project.”

An Amazon news release timed to the show’s airing says the proposed delivery idea is called Prime Air. A spokeswoman for the company said Amazon had already contacted the FAA about the project.

December 2, 2013 2:39 am

Drone deliveries beckon for Amazon

By Barney Jopson in New York

Amazon is developing unmanned aerial drones that its founder Jeff Bezos says it could be using to deliver packages to consumers within five years.

“I know this looks like science fiction. It’s not,” said Mr Bezos, unveiling a square device with eight propellers and a grip that holds onto yellow buckets for parcels.

The drone initiative is the latest in a line of so-called “moonshot” projects from the likes of Tesla’s Elon Musk and Google’s Sergey Brin, which are attempting to bring nearer a future of airborne internet providers, accelerated transit networks and self-driving cars.

Speaking on the CBS programme 60 Minutes, Mr Bezos said the drones could enable the online retailer to deliver packages within 30 minutes of customers pressing the “buy” button on Amazon.

“I don’t want anybody to think this is just around the corner,” he said. “But could it be … four or five years? I think so.”

Amazon said it had to wait for the drones – which it calls Octocopters – to be permitted by Federal Aviation Administration rules.

Mr Bezos said the drones would not be controlled remotely by human operators. “These are autonomous. So you give them instructions of which GPS coordinates to go to, and they take off and they fly to those GPS coordinates,” he said.

He said Amazon needed to do more work on the technology to ensure that “this thing can’t land on somebody’s head while they’re walking around their neighborhood”.

The mooted service, which Amazon is calling Prime Air, would be the most extreme example of Amazon’s efforts to win more business from bricks-and-mortar stores with ever faster delivery speeds.

Amazon has already drawn Walmart and eBay into a race to offer same-day courier delivery, a challenge to the instant gratification offered by bricks-and-mortar stores.

Amazon ensured the drone project was revealed on the cusp of Cyber Monday, a big day for online Christmas shopping – timing that is likely to ensure it gets a big chunk of media attention on the day.

Asked if drone-based deliveries would be cheaper than deliveries by trucks and truck drivers, an Amazon spokeswoman did not answer directly but said: “We’ll be ready to enter commercial operations as soon as the necessary rules are in place.”

She also said that the drones’ eight engines were electric, “making it inherently greener than today’s standard delivery vehicles”. She added: “We expect rapid innovation in this space in a relatively short period of time.”

Mr Bezos said the drones could carry packages that weigh up to 2.3 kilogrammes, which account for 86 per cent of the goods Amazon delivers.

Amazon posted a video on its website of a drone taking off from one of its warehouses and landing outside somebody’s front door.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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