In its second-largest acquisition, Amazon buys the company for $970 million.
The leading U.S. e-retailer tests 30-minute e-commerce delivery via drones.
The future might bring more relief for shoppers who’d rather sell their first born than go anywhere near busy stores or malls. At least that's the vision put forth by Amazon.com Inc., which says it is working a drone-based delivery system called Prime Air.
“The goal of this new delivery system is to get packages into customers' hands in 30 minutes or less using unmanned aerial vehicles,” the e-retailer, No. 1 in the Internet Retailer Top 500 Guide, says in a statement. “Putting Prime Air into commercial use will take some number of years as we advance the technology and wait for the necessary [Federal Aviation Administration] rules and regulations.”
A spokeswoman for the Federal Aviation Administration said today it will likely take "several years" to come up with rules that would allow such commercial drone deliveries.
Last month, the agency released an "Unmanned Aircraft Systems roadmap" that seeks to outline "what we need to do to safely integrate unmanned aircraft into our national airspace," said Michael Huerta, the agency's administrator, during a speech in Washington, D.C. "It provides a five-year outlook and will have annual updates." He estimated that some 7,500 drones would be flying in the United States within five years. He said the first U.S. commercial drone flight took place in September, a surveying mission for an energy project.
A video Amazon released shows a test of the service. A consumer makes a purchase from a tablet and chooses “Prime Air 30 Minute Delivery” as his shipping option. The scene moves to an Amazon warehouse where the product is placed in what looks like a sturdy plastic box that gets sent down a conveyor belt to the drone. The drone flies much like a helicopter would and it resembles an electric typewriter case with legs, not the raptor- or missile-like shapes found in some military drones. In the video, the package, in the clutches of the drone, takes flight from the warehouse and soars into a blue sky before swooping down over a bucolic field and landing on the front walk of the consumer’s house.
The drones would deliver packages of up to five pounds, Amazon CEO Jeff Bezos said on the TV news program “60 Minutes” last night. Such packages account for 86% of Amazon deliveries. Amazon did not immediately respond today to a request for more details about the drones.
“After my weekend of watching people teem through malls and strip centers, drone deliveries seem downright appealing,” says Paula Rosenblum, managing partner at research and advisory firm RSR Research LLC. “There are plenty of details to be worked out, including liability issues and air traffic. But there will be people who don’t enjoy the in-store experience that will be happy to take drone deliveries. But it’s also apparent that a pretty big segment of the population is still in love with crowds and the store. I think we can never lose track of the social side of shopping.”
Testing drone deliveries represents Amazon’s latest move to gain the loyalty of shoppers through shipping. Last month, for instance, Amazon kicked off a Sunday delivery service in New York and Los Angeles for members of its $79-per-year Prime free shipping program.