[video] Amazon's Drones Set to Take Out UPS, FedEx (Update 2)
Updated from 9:26 a.m. to include analyst comments in the sixteenth paragraph.
NEW YORK (TheStreet) -- Amazon
In an effort that could disrupt the very underpinnings of UPS
"I know this looks like science fiction," Bezos said during the interview, while unveiling the automated delivery drones. "It's not."
The normally secretive Amazon unveiled the drones to interviewer Charlie Rose, who promptly responded with "Oh my God!" when seeing the technology at work.
There's been a lot of early skepticism about the drones, with a parody Twitter account set up, and millions taking to other forms of social media to mock the new service. Bezos, however, appeared optimistic and excited about the new service. "It will work, and it will happen," Bezos said during the interview. "And it's going to be a lot of fun."
Bezos didn't disclose the cost of the drones, or how they would work, which are dissimilar to the drones that the U.S. military uses.
The idea behind the drones from the Seattle-based Amazon is to get packages and goods into the hands of customers with the drones originating from Amazon's many fulfillment centers. Amazon has said previously it intends to add a net seven fulfillment centers this year, with 89 as of 2012. Bezos noted during the interview Amazon is on its seventh generation of warehouses.
Currently, Amazon has Amazon Prime, which allows users to pay $79 per year to get free two-day shipping for goods. The service also allows users to watch movies and television shows, in an attempt to compete with Netflix
Amazon has never publicly disclosed how many customers have the Prime service, though it did say in its third-quarter earnings release it signed up "millions of new Prime members."
On Amazon's Web site, the company noted it expects to roll out the service by 2015, and is working with the Federal Aviation Administration to get the drones to be regulated. "Putting Prime Air into commercial use will take some number of years as we advance the technology and wait for the necessary FAA rules and regulations," Amazon said on its Web site.