This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

#DigitalSkeptic: Bezos Will Get Lost in Drone Twilight Zone

Bumps on the drone road
DreamHammer's high-flying investor insight is exactly this: Bezos' hype aside, drones are as un-revolutionary as un-revolutionary gets. In fact, remote-controlled unmanned flight systems date from -- get ready, robot drone hipsters -- the early days of World War II! All the way back in 1939, Hitler's Luftwaffe commissioned something called the Argus As 292, a remote surveillance craft that saw live service by 1942. And go take a peek at the Fieseler Fi-103, known as the V-1 Flying Bomb. This unmanned craft, which saw service over London in 1945, bears a striking resemblance to today's RQ-1 Predator drone.

Both have single-jet engines, no place for a pilot and active remote control.

Unmanned aircraft use has continued since, or three times longer than the commercially deployed Internet. And military unmanned vehicles such as Northrop Grumman's (NOC) RQ-4 Global Hawk and X-47B flying jet and the Lockheed Martin (LMT) K-Max self-flying helicopter have seen essentially continuous duty worldwide for decades.

"These craft are extraordinarily autonomous and reliable," Diebner said. "Each has hundreds of thousands of hours of doing far more complex things than dropping off boxes on doorsteps."

Must Read: We Have Fewest Banks Since 1934, But That's Not Necessarily Bad

It turns out, rather, that the challenges Amazon Prime Air will face lies in the minutiae of bringing the large-scale, unmanned aircraft market down into the retail sales channel. Here lies a veritable Twilight Zone of nickel-and-dime issues that will weigh down quickly Bezo's dream of getting into the itty-bitty airplane business.

"You will need a remarkable amount of redundancies in these systems to keep them safe," Diebner said. That implies the entire drone hardware equation, including material science, battery systems, communications infrastructure, autopilots, payload management and control systems, must be reinvented for small craft plying high-population areas.

Next, there will be significant software problems to overcome with drones. The unmanned plane market is so mature that Paez estimates there are thousands of flying drone makers worldwide, each of whom may -- or may not -- use common computer languages needed to host an active service such as Prime Air.

"We integrate all this software now," Paez said. "It's like the early days of the PC. There are a lot of DIY makers writing their own code. And that's a tough market to scale."

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $125.59 0.85%
FB $86.46 0.77%
GOOG $521.52 0.00%
TSLA $266.40 1.70%
YHOO $39.32 1.10%

Markets

DOW 17,596.35 -350.33 -1.95%
S&P 500 2,057.64 -43.85 -2.09%
NASDAQ 4,958.4680 -122.0370 -2.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs