Amazon's 30-Minute Drone Delivery Is No Joke

Amazon Prime Air could provide another edge over Wal-Mart

Never mind all of this year's crazy Cyber Monday deals; I know I'm not the only one who'd pay full price to watch a flying drone drop a package on my front lawn within 30 minutes of placing my order.

If that sounds too awesome to be true, note that it's exactly what Amazon.com (NASDAQ: AMZN  )  CEO Jeff Bezos says his company is planning with a new service dubbed "Amazon Prime Air."

In a 60 Minutes interview Sunday, Bezos unveiled Amazon's "octocopter" drones, which will be capable of using GPS coordinates to fly packages under five pounds -- the vast majority of packages they deliver, mind you -- right to doorsteps within a 10-mile radius of Amazon's ever-growing number of fulfillment centers.

Given the caveat that he's an optimist, Bezos also elaborated to say drone delivery won't be possible for at least another "four or five years," especially considering the additional work required to both perfect the system and demonstrate "to the standards of the FAA that this is a safe thing to do." 

Nonetheless, skeptics and comedians alike immediately took to the Web to make light of the announcement, wondering about things like drone reliability, how neighborhood dogs will react, whether we should brush up our air gun skills, and asking tongue-in-cheek questions like "Do I need to order a copy of Orwell's 1984 via Amazon drone? Or will the algorithms just know when to drop me one?"

Heck, quirky British book retailer Waterstones even hilariously responded with what they're calling O.W.L.S., or the Ornithological Waterstones Landing Service, which "consists of a fleet of specially trained owls that, either working individually or as an adorable team, will be able to deliver your package within thirty minutes of you placing your order."

The funny thing is, Amazon Prime Air is no joke, and I think it's a massive mistake for the online retail behemoth's competitors to underestimate its potential.

On one hand, while equally enormous retailers like Wal-Mart (NYSE: WMT  ) certainly boast impressive scale, Amazon is arguably the only company in a position to both successfully spearhead drone delivery and implement it on a wide scale.

On the other hand, Amazon might also be the only company brave enough to tackle the seemingly ludicrous idea with a straight face.

But remember we're also talking about a business which spent $775 million last year to acquire industrial robot-maker Kiva Systems for its fleets of warehouse-optimizing, shelf-carrying robots. Kiva's technology, in turn, has helped to further Amazon's quest to grow its enterprise value by affording it the ability to offer low prices even the mighty Wal-Mart often can't touch.

And besides, given the incredible amount of money Amazon currently spends with third-party shippers like UPS and FedEx, it makes plenty of sense to take matters into its own hands with as automated an approach as possible. What's more, while Amazon's 30-minute drone delivery service won't be available everywhere in the near future, you can bet it won't take long for the company to increase both the drones' effectiveness and their range.

So take heed, investors, because despite its challenges, I think it'd be foolish (with a lowercase "f") to bet against a powerful company with both the means and the financial motivation to make this work.

In the words of Bezos himself: "It will work, and it will happen, and it's gonna be a lot of fun."

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