GOOG.AMZN.Drones

Google vs. Amazon: Let The Drone Delivery Wars Begin

Yesterday, Google (GOOG) announced it’s been working on a drone delivery service, dubbed “Project Wing,” for nearly two years.

You’ll recall, last December, Amazon (AMZN) went public with it’s own drone delivery ambitions.

Is a drone delivery war inevitable now?

That was the topic of discussion when I appeared on CNBC’s Closing Bell today. Check out the clip below to find out why I think there’s a possibility the two companies might end up collaborating, not competing.

As an added bonus, around the four-minute mark, Kelly Evans issues an apology to me.

You’ll have to watch the clip to find out why.

Hint: It’s related to a bold prediction I made in January regarding Apple (AAPL).

For those that don’t have time, here’s a rundown of my main talking points:

  • Don’t assume the obvious. Remember Google’s secretive barges? They caused a lot of speculation about being floating data centers or unique store fronts for the commercial launch of Google Glass. To date, nothing’s materialized. In the case of the drones, the obvious implication is Google’s preparing to go head to head with Amazon. However, we need to consider the possibility the company’s preparing to be an infrastructure provider for drone delivery services. Remember,Google’s expertise lies in data, analyzing data, as well as mapping. They could be building the knowledge base to provide the infrastructure for drone delivery service providers, not necessarily gearing up to compete directly with Amazon.
  • Drone invasion still years away. Amazon pegged it at five years. Google’s been more ambiguous, saying it’ll be “several” years before drone delivery services can begin. I think both timelines are aggressive, as formidable obstacles exist. On the regulatory front, the FAA presently permits virtually no commercial of drones. On the technical side, precise navigation needs to perfected to prevent packages from ending up at the wrong doorstep. And on the safety front, “detect and avoid” technologies need to be developed to avoid crashes with power lines, other drones, wildlife and other unexpected scenarios.
  • Not about a war. It’s about legitimacy and acceleration. Drone wars certainly make for great headlines. But Google’s entrance is more about legitimizing and accelerating innovation. If it’s just Amazon, drone delivery is a crazy, far flung idea. Add Google into the mix and all of a sudden this becomes a credible trend. It should help other innovators in the space more easily attract resources, too, which will serve to accelerate innovation.

 

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