This Day On The Street
Continue to site
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

Amazon, Google Drones Unlikely to Deliver Major Revenue Right Now

NEW YORK (TheStreet) -- The Federal Aviation Administration's approval of industry partnerships that will evaluate drones operated beyond the pilot's line of sight won't create much of a bottom-line benefit for retailers, including Amazon (AMZN - Get Report), anytime soon.

According to analysts, even with the FAA showing an inclination toward approving drones for commercial use, there's unlikely to be a substantial impact for Amazon, Google (GOOGL - Get Report) or any retailer because of the likely huge initial cash outlay to construct the needed infrastructure.

"This additional fulfillment method is unlikely to drive sales overall," said Leslie Hand, vice president at IDC Retail Insights. "Will consumers want to try it out? Yes. The consumers that will be excited to choose drone delivery are probably the same consumers that wait in line for the next best electronic gadget."

Amazon may be the most visible proponent of using drones having actually developed and publicized a test vehicle and program dubbed Prime Air. Amazon declined to comment for this article but the company has said the concept is not science fiction, and that with regulatory approvals it will attempt to implement drone delivery at some point in the future.

Must Read: Warren Buffett's Top 10 Stock Buys

Google, which declined to comment, has its Project Wing that first took flight last year.

Some industry watchers said certain segments of the economy could benefit by using drones depending upon how they are implemented.

Yory Wurmser, retail analyst at eMarketer, is pessimistic drones will have a major impact although he noted it could boost the revenue for any early testers and give them the additional exposure as being a market leader.

"I think any major positive impact from drone delivery is several years away, if it comes at all," Wurmser said. "Drone delivery still seems very gimmicky. I can see some small-scale trials, but any mass adoption has a range of business and regulatory hurdles to overcome."

The financial side of the puzzle is another major obstacle. Not only do the drones have to be perfected, but retailers would have to install a huge support system.

1 of 2

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AMZN $617.43 1.70%
GOOG $716.63 0.30%
GOOGL $733.17 0.31%
AAPL $98.53 1.62%
FB $97.51 0.18%


Chart of I:DJI
DOW 16,398.57 +52.12 0.32%
S&P 500 1,923.67 +1.64 0.09%
NASDAQ 4,637.9890 -5.6420 -0.12%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs