Amazon spent the last decade telling investors that drone delivery was right around the corner. Right around that same corner where profitable grocery delivery lives. Where Alexa monetization hangs out. Where the Fire Phone is still selling units.
The company now plans to expand its drone service to nearly 500 cities after targeting one million deliveries this year. Math question for the class: if you need to hit one million deliveries across 500 cities, that's 2,000 deliveries per city per year. Five and a half deliveries per day. Per city. Revolutionary.
They received a key regulatory greenlight for longer-range deliveries, which sounds impressive until you remember the drones still can't fly in rain, wind, fog, or during any weather condition that might be described as weather. They also can't deliver anything heavier than five pounds, which eliminates roughly 90% of what people actually order from Amazon. But sure, let's build infrastructure for travel-sized shampoo and phone chargers.
The quiet expansion happened in recent months, which is corporate speak for we didn't announce this because we knew you'd ask questions. Questions like why are we spending billions on flying robots when trucks work fine. Or why retail investors bought this stock thinking drone delivery was imminent in 2015.
Somewhere right now a guy who bought AMZN calls based on drone hype is watching a delivery truck pull up to his house. He's waiting for his package. It contains a book about patience. The drone is still three regulatory approvals and two weather-related delays away from his zip code.
One million deliveries sounds like a lot until you remember Amazon does 1.6 million deliveries per day using those ancient pieces of technology called wheels.
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