Incorporated as “Cadabra” in 1994 by Jeff Bezos, the company went online the following year as amazon.com. It started as an online bookstore but soon diversified into DVDs, CDs, MP3 downloads, software, video games, electronics, apparel, furniture, food, toys, and jewellery. Apart from online retailing, Amazon also produces consumer electronics, notably the Amazon Kindle e-book reader and the Kindle Fire tablet computer, and provides cloud computing services.
Amazon testing 'octocopter' drones to fly packages to a customer's door
Amazon testing 'octocopters' to fly packages from its warehouses to a customer's address within 30 minutes of an order being placed
Bloomberg in San Francisco
Amazon is testing "octocopter" drones to deliver goods as the world's largest e-commerce company works to improve efficiency and speed in getting products to consumers.
Chief executive officer Jeff Bezos unveiled the plan on CBS's 60 Minutes news programme in the US, showing interviewer Charlie Rose the flying machines that can serve as delivery vehicles. He said the gadgets can carry as much as 2.3kg within a 15-kilometre radius of an Amazon warehouse.
Amazon may start using the drones, which can make a delivery within 30 minutes, within five years pending US Federal Aviation Administration approval, Bezos said. "It will work, and it will happen, and it's gonna be a lot of fun," he said.
Bezos said the drones' electric motors would help reduce the environmental impact of package deliveries. "It's very green," he said. "It's better than driving trucks around."
Delivery drones were already being used by Australian company Zookal to deliver textbooks, said Oliver Lamb, director of Sydney-based Pacific Aviation Consulting. In China, the SF Express delivery company was experimenting with drones in the southern city of Dongguan , according to a report by the Civil Aviation Resource Net of China.
"When and how to allow this kind of delivery is going to be a big question," Lamb said. "Regulators will have to deal with this and I'm sure each jurisdiction will come up with regulations to allow this in due course."
Still, the challenges to achieving a safe delivery may prove insurmountable, said Jeff Lowe, general manager of Asian Sky Group, a Hong Kong-based aviation consulting company.
"You'd have to make it idiot-proof," Lowe said. "From a height, a five pound [2.27kg] load hitting anything is going to be fairly destructive, so that can never happen. The first time it does, the FAA will ground all these drones and they will never fly again."
The research into delivery by drone is a reflection of the fact that some of Amazon's most lucrative customers are members of its Prime program, which promises fast delivery. "I know this looks like science fiction. It's not," Bezos told 60 Minutes.
"We can do half-hour delivery ... and we can carry objects, we think, up to five pounds, which covers 86 per cent of the items that we deliver."
The US Congress has directed the FAA to integrate drones into US airspace by 2015. That led US venture investors to pour US$40.9 million into drone-related startups in the first nine months of this year, more than double the amount for all of last year, according PricewaterhouseCoopers and the National Venture Capital Association.
Drones aren't the first futuristic technology to attract the interest of Bezos. Separate from Amazon, Bezos created a closely held spaceflight venture called Blue Origin, which in October said it planned to soon begin offering commercial suborbital flights.
Amazon invests heavily in distribution and delivery, which made up the largest portion of its expenses in the third quarter. Investors have endorsed the spending on capacity - the costs increased 35 per cent to US$2.03 billion - pushing up the company's shares 57 per cent so far this year even as it posts losses.
Bezos showed the drones as the growth of e-commerce sales outstrips total retail sales. On last week's Black Friday - the Friday after the Thanksgiving holiday in the US and the biggest shopping day of the year - e-commerce spending increased 15 per cent to a record US$1.2 billion as more consumers opted to shop from home, according to ComScore. Amazon was the most visited online retail store.
Additional reporting by Agence France-Presse