Please ensure Javascript is enabled for purposes of website accessibility

1 Reason Amazon May Want Google's Robots

By Chris Neiger - Mar 23, 2016 at 2:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

No, it doesn't want to take over the world -- yet.

Source: Boston Dynamics.

Since Alphabet's (GOOG 5.20%) (GOOGL 5.11%) Google purchased Boston Dynamics, the robotics company has received a lot of press. Most of it has revolved around its Atlas robot, which can walk around on its own, pick up objects, and stands back up if you knock it off its feet (needless to say, it makes anyone who's seen the Terminator movies just a little uneasy).

But despite the capabilities of the company's robots, Google hasn't quite found a specific use for them, and is reportedly putting Boston Dynamics up for sale. A recent Bloomberg article named Amazon.com (AMZN 3.58%) as a potential buyer (as well as Toyota) -- and there are few reasons why Boston Dynamics could be a very good fit with Amazon.

Amazon loves robots
Amazon has built quite an army of robots that work alongside its warehouse workers, helping them to fulfill online orders and move around inventory. Amazon bought Kiva Robots back in 2012 for $775 million, and starting using them in its warehouses in 2014. The smaller bots are able to pick up pods full of Amazon items weighing up to 750 lbs., while the large ones can haul up to 3,000 lbs. Now, Amazon uses more than 30,000 robots, and it wants to expand their usage. 

Amazon's director of investor relations, Phil Hardin, said on the company's Q3 2015 earnings call: "We are up to 30,000 bots at the end of Q3, and in the 13th fulfillment center. Our intent is to use that more widely, so stay tuned."

The company uses the robots to help lift things that are heavy for humans to carry, or finds items that would take too long for workers to track down and carry back themselves. But at the core of Amazon's robot operations is to make order fulfillments as efficient and cost-effective as possible. 

And that's where Boston Dynamics could prove useful. The company makes a wide range of robots from four-legged robot-dogs that can carry heavy equipment to biped humanoid robots like Atlas. But the real value in Boston Dynamics -- at least for Amazon -- could be for using its robotics software and employee talent. 

Sure, Amazon might try using biped robots to pick up packages and move them around the warehouse, but that would be a very expensive way to fulfill an order. Instead, I think Amazon is interested in using the robotics know-how that Boston Dynamics has, and apply it to the company's own Amazon Robotics team.

Amazon is constantly looking for ways to make its delivery services cheaper, faster, and more efficient, and making its current robots (or future iterations) smarter and more capable could certainly help with that.

Foolish thoughts
We don't know yet whether or not Amazon will buy Boston Dynamics, of course. But it wouldn't be out of the company's scope to make a big bet on something that could boost its retail position. 

Amazon is laser-focused on improving its online order fulfillments and improving warehouse efficiencies. If Boston Dynamics can bring it one step closer to that, you can bet that Amazon will be bidding for the robotics maker once it goes up for sale.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,359.50 (5.11%) $114.66
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$116.46 (3.58%) $4.02
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,370.76 (5.20%) $117.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.