Why Amazon Prime Air Drones May be Delivering Your Packages Sooner Than You Think

When Amazon CEO Jeff Bezos took the company's case for drone delivery to a national audience on "60 Minutes," it very publicly helped to force the hand of the FAA to develop guidelines for unmanned aircraft -- and soon. That may benefit not only Amazon, but a broad range of other U.S. industries eager to put these unmanned aircraft to use

Apr 24, 2014 at 12:30PM

The Federal Aviation Administration will begin testing a commercial drone at a site in North Dakota around May 5. This is months ahead of the FAA's mid-year deadline to begin testing, and that could reflect the agency's realization that it needs to step on the gas when it comes to unmanned aircraft.

Why? Because American industries are fast figuring out uses for drones, and the U.S. is already trailing other countries in this budding area of technology. In some cases, it's well behind. With potential uses in everything from medicine to agriculture, the FAA has good reason to speed things along in the name of progress.

Yes, there's a market for aerial drones, and it's diverse. But we can't ignore the fact that Amazon (NASDAQ:AMZN) drew a lot of attention to unmanned aircraft just before Cyber Monday when it unveiled plans for drone delivery on an episode of CBS's "60 Minutes." The report triggered follow-up stories and water-cooler conversations for days.

Amazon Drone Wired

Source: Wired.com

Jeff Bezos' appearance on CBS that Sunday put commercial drones -- at least non-military drones -- in the public eye. Amazon wants the unmanned aircraft so it can offer super-fast delivery of 30 minutes or less from the time of order. But the use of drones will extend well beyond America's e-tail king and its sci-fi-esque delivery plans. Market research company Teal Group estimates a worldwide market for aerial drones of $89 billion over the next 10 years.

So, where will we see these drones being put to use?

Let start with crops
This North Dakota testing site is one of six planned to help the FAA develop rules for small unmanned aerial vehicles, which Congress wants in place by 2015. The site's focus, at least for now, is on agriculture. It's as good a starting point as any. Drones can be used to dust crops with fertilizers, pesticides, and fungicides. They can also be used to seed fields.

We know this because Japan has been using drones for these purposes for more than two decades.


The Yamaha Rmax used for crop dusting. Source: Yamaha-motor.com.

The unmanned aircraft allow for more precise application than tractors do. They also offer far great maneuverability – and much less risk – than crop-dusting airplanes. As Gizmag.com pointed out last June, agricultural chemicals can be applied with greater accuracy. That reduces costs, keeps farm workers minimally exposed to the chemicals, and offers the most environmentally friendly approach, since the chemicals are being applied right where they are intended.

The trade group that represents producers of drones estimates that 80% of the commercial market for drones will be for agricultural uses.

That swanky house for sale looks even better from the air
Some real estate companies are hoping to use the drones to provide aerial photographs and video that they can use to upgrade their online listings of properties. This type of photography is especially important when it comes to high-priced, palatial estates, where an aerial view of an impressive property can make it appear even more impressive than the view from ground-level. That's why the National Association of Realtors is among the groups lobbying the FAA to set guidelines for drone use. It's also why some real estate companies are already reportedly violating the existing commercial ban and using the drones now.

There are a number of other areas where drones may find regular use. On the urgent-need front, there's the delivery of medical supplies to remote areas. German delivery company DHL is testing its "Parcelocopter" with these deliveries in mind. Drones could also be used for emergency food or supply drops.

There's also movie and television production, and particularly sporting event coverage. In Australia, TV networks already use drones to cover cricket matches. There's also interest in drones for news-gathering purposes, and the Associated Press is among the groups eager to see how they can be used.

The Foolish bottom line
In Bezos' annual letter to Amazon shareholders earlier this month, he indicated that the company's Prime Air team is testing fifth- and sixth-generation drones and already working on the design of its subsequent two generations of unmanned delivery aircraft.

Whether or not Amazon will get its drone delivery off the ground in five years is anyone's guess. But when the interest of such a high-profile U.S. company was expressed to a national audience in dramatic fashion – drawing headlines and spurring debate – it very publicly helped to force the hand of the FAA. That publicity may benefit not only Amazon, but a broad range of other U.S. industries eager to put these unmanned aircraft to use.

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John-Erik Koslosky has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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