Two big pieces of news dominated the consumer and technology airspace all of last week. One was the often-repeated and rumoured-for-many-years news that ‘Amazon was about to release its own smartphones’. The other was the more front-page-headline-making ‘Amazon to air deliver your items in less than 30 minutes by flying them to your house in a drone’! Both are game changers if they happen – the first will hit like a sledgehammer into other smartphone manufacturers’ sales; the other is just so outlandish and yet so deliciously exciting as a concept that people are setting up mini landing pads on their roofs to be the first to get a Prime Air delivery. Let’s get a reality check on both.
Reasons why Amazon smartphones will happen
The first rumours about Amazon coming up with two or three different smartphone models surfaced right after they came out with their tablets. Thus it’s been quite a while and every year predictions with new dates, new features and new pricing models are revealed, and here we are, almost three years later, with no Amazon smartphones. But make no mistake, they will come and that too very soon. Here are three reasons why no power on Earth can keep Amazon smartphones from making a very dramatic entry.
Amazon has tasted amazing success with their Kindle Fire tablets and is the second largest selling tablet in the world after the iPad. Thus, they already have a consumer base as well as high consumer acceptance for their devices. A smartphone is therefore, a no brainer.
The idea for Amazon to get into this space was to have devices that are locked into the Amazon media ecospace. Thus books, movies, songs and the entire Amazon shopping network in your pocket is the best way for Amazon to continue to be the world’s largest online retailer. They own you on your tablet, smartphones sell much more than tablets, do the math!
Amazon is extremely aggressive in pushing the envelope in terms of features, specifications, hardware and most importantly price. A high-end, top-specced, super flagship smartphone from Amazon can be sold at rock-bottom prices, (some rumours say that it’ll be given away free. That is utter nonsense and just not Amazon’s business model) thus bringing in great numbers in sales and also becoming a huge catalyst in fuelling even bigger sales of all things from the Amazon marketplace. They know this business well, so why wouldn’t they do it with smartphones, the world’s largest selling consumer device?
So get ready and start saving some money (not to buy the phones, as those will be very well-priced – save money for all the shopping you’re going to do off those phones) as at least two Amazon smartphones are just around the corner.
Reasons why Amazon Drones won’t happen
Sorry to break that awesome image you were conjuring up in your mind of you placing an order, a drone picking it up from an Amazon warehouse, flying across the city and dropping it at your doorway – all in 30 minutes or less. It’s great science fiction and it will remain just that – fiction! It won’t happen now or even in the next 10 years. Here are three reasons why this is just hot air of epic PR proportions!
Let’s be very clear, it’s not technology playing the spoilsport here. The capability to do this isn’t very far away. The drones exist, mapping is getting better every day and in another year or two, anti-collision technology to make sure that the drones don’t bump into each other or tall poles or electricity wiring and/or other cityscape hurdles.
The first problem here is purely logistical. Amazon has almost all warehouses built far away from cities (it’s the only way to have huge warehouses).
Drones, even with fantastic new technology can’t do more than about 15 to 20 kilometres flying (both ways). Thus that would mean creating smaller Amazon Droneports inside cities, which destroys the entire business model that Amazon has painstakingly built over many years.
The second problem is money or more specifically, making sure that these awesome drones make some money for Amazon. This isn’t going to be a venture for charity or a higher purpose, this is a commercial project that must make sense financially. These drones can only deliver small and light products, are expensive to buy, run and maintain, the entire infrastructure around these drones from sorting to pickup to delivery will have to be built from scratch and that will be exorbitantly expensive, and each delivery yet must make a profit. As of now, it won’t!
The third big barrier to overcome is of course our old friends – regulations, licensing and liabilities. Drone technology must be licenced by each country and sometimes by each city and zone. As of now it’s a big no all across the world for consumer level drone usage (yes, it’s legal to drone bomb your house with you in it, but it’s not legal to drone deliver your toothpaste to you in your house). Even if the regulations will come into play one day, the liability of injury are a huge issue. The first drone to lop off your pet dog’s head or injure a curious child will send the entire drone delivery business crash landing into billion-dollar liability suits. I don’t see Amazon willing to take such a huge financial risk just to make sure you get your stuff in 30 minutes.
There you have it. Two big pieces of news from the same company – all in the space of one week. Running a reality check on both seems to have separated the wheat from the chaff. Smartphones are in; drone deliveries are out! One out of two isn’t that bad!
Rajiv Makhni is managing editor, Technology, NDTV, and the anchor of Gadget Guru, Cell Guru and Newsnet 3.
From HT Brunch, December 8
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