Top AMZN Innovations – Amazon Drones (AKA Amazon Prime Air)
Actual launch date: 2017 or 2018
Of course, arguably the biggest news out of AMZN this year was one that feels more sci-fi than reality. Jeff Bezos recently went on 60 Minutes, where he laid out a vision of Amazon packages being delivered by armadas of drones.
While the news had everyone talking, there are several problems with this plan. First, drones have an unfortunate tendency to crash into stuff and explode. And though Bezos said that such a service would be ready in four or five years, it doesn’t seem likely that the Federal Aviation Administration will even have its drone regulations finished by then.
Then, like everything about Amazon, there is the issue of cost. Sure, AMZN stock investors seem fine with Bezos & Co. blowing all its sales on the next big thing for now. But how long will it last? I’m no expert, but nothing about drones sounds cheap. Besides, I would think that Amazon will have difficulties in pricing competitively against FedEx (FDX) and UPS (UPS).
Amazon drones may have captured everyone’s imagination, but I wouldn’t call them a reason to buy AMZN stock.