E-commerce giant Amazon.com Inc. (AMZN) has requested Federal Aviation Administration (FAA) to grant permission to fly drones out of their test facility.
Per earlier FAA guidelines, hobbyists and model aircraft makers are allowed to fly drones, but commercial drone delivery to people for a fee remains illegal. Amazon has, therefore, requested FAA for an exemption so that it could test its drones in the U.S.
Amazon is currently working on a drone-based delivery service which will use airborne robotic drones to deliver packages to consumers in 30 minutes. The company claims that these eighth and ninth generation drones can fly up to 50 miles per hour and carry nearly 5 pounds. The company also said that it will abide by stricter safety measures than required by FAA policies and regulations for such operations.
Drones are Unmanned Aerial Vehicles that are either pre-programmed or controlled by pilots from the ground. While some of these drones are small enough to fit in a child’s palm, others are as massive as jumbo jets. These can be programmed to perform various tasks ranging from surveillance, agriculture, pizza delivery, extreme photography to rescue operations. However, the technology is still in a nascent stage.
Amazon, which so far focused on selling products, is now striving to beef up its delivery system in order to improve customer service. In this regard, Amazon purchased Kiva Systems in 2012 for $775 million to include robots in its distribution centers. Also, last month, Amazon unveiled a new food takeout service to expand Amazon Local services. The service was launched in Seattle and is expected to be gradually offered globally. However, it is not certain how Amazon plans to expand this service.
It is interesting to note that Amazon, the world's largest online search engine, is increasingly strengthening its foothold in new markets. Other technology giants like Facebook (FB) and Google (GOOGL) are also expanding their presence in the dynamic world of robotics, increasing the competition for Amazon.
Amazon currently holds a Zacks Rank #5 (Strong Sell). PetMed Express, Inc. (PETS) is a better-ranked stock with a Zacks Rank #2 (Buy) and therefore, worth considering.
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