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Reinventing Business

Amazon's Drone Fleet Delivers What Bezos Wants: An Image of Ingenuity

The Prime Air octocopter

Photograph courtesy Inc.

The Prime Air octocopter

In his 2010 internal “Amazon.Love” memo to senior executives, Amazon (AMZN) Chief Executive Officer Jeff Bezos identified a serious problem that can plague big, successful companies: They tend to be feared and, in some quarters, hated. Retailers in particular often engender anxiety as they displace smaller, sympathetic competitors and as the frugality that pervades their operations starts to look suspiciously to some like exploitation of their own workers. Bezos had an answer to the perennial big-company image problem. “Risk taking is cool,” he wrote. “Inventing is cool.”

The memo—excerpted in my book about Amazon—was written more than three years ago but it perfectly captures current Amazon’s conundrum. The company is on track to record $75 billion in sales this year, and by most accounts it is winning the e-commerce holiday war. For today’s online spending spree known as Cyber Monday, Amazon plans to take 300 orders a second. Yet criticisms abound: Workers in Germany are striking, and a recent investigation by the BBC suggested there are physical and psychological consequences to the menial labor required of workers in Amazon warehouses.

So the decision by Bezos and his colleagues on Sunday to reveal the company’s latest lofty goal of delivering packages via unmanned aerial vehicles seems like a characteristic retort, directing the spotlight elsewhere. In a largely flattering segment on 60 Minutes, Bezos allowed correspondent Charlie Rose to tour a 1.2 million-square-foot Amazon fulfillment center and then pitched an eye-popping service called Amazon Prime Air. An army of small autonomous octocopters, Bezos told Rose, will one day leave Amazon warehouses, take to the skies, and transport packages up to 10 miles away, effortlessly dropping into customers’ picturesque backyards to deliver a single order.

The plan is utterly audacious, and before yesterday it would not have seemed out of place as the topic of a satirical news headline in the Onion. Bezos conceded there are plenty of issues that must be worked out first and that the actual service might not launch for years. The FAA is evaluating (PDF) new rules for commercial use of drones and must ensure total safety before opening up the skies to Amazon and other companies. There is also a universe of possibilities around interference: Won’t folks make a sport of stealing these vehicles or shooting them out of the sky?

And would Amazon’s coming drone army even be an efficient way to deliver products? Bezos said the drones can carry up to five pounds, which encompasses 86 percent of the items Amazon delivers. But many small items ordered by customers in the same shopping session are combined in larger boxes, and then those boxes are crammed into trucks with thousands of other shipments destined for customers who all live near each other. Dispatching an aerial vehicle for each individual order does not seem very efficient, particularly in high-density urban areas or during peak shopping seasons.

Yet all that is beside the point. The aerial drone is actually the perfect vehicle—not for delivering packages, but for evoking Amazon’s indomitable spirit of innovation. Many customers this holiday season are considering the character of the companies where they spend their hard-earned dollars. Amazon would rather customers consider the new products and inventions coming down the pipeline and not the ramifications of its ever-accelerating, increasingly disruptive business model.

Judging by the largely awed reactions in the press and on social media to the 60 Minutes piece: Mission accomplished.

Stone is a senior writer for Bloomberg Businessweek in San Francisco. He is the author of The Everything Store: Jeff Bezos and the Age of Amazon (Little, Brown; October 2013). Follow him on Twitter @BradStone.

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