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5 Weekend reads in robotics, drones and their economic impact

BCG Rise of Robotics

Inside Google’s Secret Drone-Delivery Program

This may sound crazy. This may be crazy. But Google is getting serious about sending packages flying through the air on tiny drones. And this is how that happened.

The Rise of Robotics (Boston Consulting Group)

Spending on robots worldwide is expected to jump from just over $15 billion in 2010 to about $67 billion by 2025.

Artificial Intelligent System Creates Descriptive Sentences Directly From Videos

Summarizing what is going on in a video is another task that may soon be done automatically thanks to work done through the Video In Sentences Out study. Using artificial intelligence deep learning methodology, a team has already been able to achieve accurate results in almost half of the videos the system has examined.

Unmanned Cargo Aircraft

The American Federal Aviation Administration predicts that in forty years’ time, some 40% of air cargo will be transported by unmanned aircraft.

Artificial intelligence must be possible. What’s holding us up?

The field of ‘artificial general intelligence’ or AGI — has made no progress whatever during the entire six decades of its existence. Despite this long record of failure, AGI must be possible.

6 reads in AI, Robots, Drones and Economics

This is an excellent response to a post by Marc Andreesen – What you left out was the essential question: who owns the robots? (By Alex Payne)

Microsoft Unveils Machine Learning for the Masses (New York Times)

AI’s dueling definition: Why my understanding of AI is different from yours. (O’Reilly Radar)

More Robots won’t mean fewer jobs (Rodney Brooks on Harvard Business Review)

Before you travel to a city why not see how it looks from the air? (Travel By Drone)

Our Work Here is Done: Visions of a Robot Economy (Free eBook by Nesta). Contributors: Ryan Avent, Frances Coppola, Frederick Guy, Nick Hawes, Izabella Kaminska, Tess Reidy, Edward Skidelsky, Noah Smith, E. R. Truitt, Jon Turney, Georgina Voss, Steve Randy Waldman and Alan Winfield.

The economics of Amazon’s delivery drones

prime-air_high-resolution01

Last December there was a lot of skepticism when Jeff Bezos, CEO and founder of Amazon, announced on the 60 minutes TV program that they were looking into using drones for delivering small packages. Many pundits called it a publicity stunt and nonsense! — timed for the biggest online shopping day of the year .

Bezos on the other hand was bemused and took pains to point out in his 2013 annual letter to shareholders that Amazon are serious about delivery by drones, writing: “The Prime Air team is already flight testing our 5th and 6th generation aerial vehicles, and we are in the design phase on generations 7 and 8.”

On their Prime Air Q and A page Amazon anticipate FAA’s rules for commercial drones will: “be in place as early as sometime in 2015.” And state: “We will be ready at that time.”

To be ready they are assembling a team said to already consist of between 45 to 50 employees and at least 10 additional personnel sought according to job openings on Amazon’s website.

Job postings for the Prime Air team range from a Patent Lawyer, to a Communications Manager, Software Engineers, Machine Learning Engineers, Executive Assistant, Project Coordinator, Research Scientist and Technical Program Manager.

To give you a taste of what the company is aiming for, the Communications Manager post indicates:

We’re looking for a communications leader for Amazon Prime Air, a new delivery system that will get packages into customers’ hands in 30 minutes or less using unmanned aerial vehicles.

So what’s driving Amazon’s Prime Air initiative?

Instant gratification from customers is clearly one element; providing outstanding service is another; as is staying ahead of the curve with innovative delivery and order fulfillment. All highly significant points in their own right to meet Amazon’s goal: “to be Earth’s most customer-centric company.”

Cost of transportation is another. Amazon’s total shipping costs in 2013 were $6.635 billion. They received shipping revenue of $3.097 billion and incurred overall losses of $3.538 billion related to shipping costs.

Amazon shipping costs

Amazon use several services for shipping, UPS, FedEx, US Postal, and others as well as developing their own City Pick Up points, delivery van service and Amazon courier cycles. Shipping is clearly a major cost factor to Amazon and one where they are focused on improving service whilst reducing cost.

Technical difficulties

In addition to the regulatory hurdles that must be overcome there are many technical difficulties.

Amazon is aiming for their drones to deliver shoebox size packages.

They probably do not want video onboard due to the extra weight on the drone and also privacy concerns, so will need another way of identification before customers can accept delivery, e.g. biometric identification or pin code to release the package provided with the consignment email – package drop off will be a challenge.

Wind will be a factor in delivery.

Sense and avoid – very few of the current breed of drones (especially the hobbyist drones) have sense and avoid capabilities and should not be flown where there are people or objects.

Amazon will want their drones to be as safe as regular manned planes. Piloted planes have 9.4 accidents per million flights, in other words statistically very safe.

CyPhy Works is possibly the leader in this drone technology with their tethered drones having already developed high payload, high wind, environmentally sealed systems.

GPS lock is an issue that has caused drones to drop out of the air and piloting inexperience is also a major issue, although one the FAA is looking very closely at and I’m sure Amazon will too – drones should never be operated without formal training and some license arrangements.

Another hurdle will be location for dispatch – most of Amazon’s Fulfillment Centers are outside major cities, although it is probable that the items Amazon will provide via Prime Air will be a vastly reduced inventory and kept at the Amazon Pick Up points or smaller Fulfillment Centers closer to major city centers.

These are just a few of the technical hurdles, not insurmountable and as Amazon state they will be ready when the FAA approve the use of commercial drones.

Will drones be more cost effective?

According to shipping-industry analysts Amazon typically pays between about $2 and $8 to ship each package, with the cheapest option through the Postal Service and the most expensive via UPS or FedEx.

Amazon may be able to get a premium price for the Prime Air delivery service – customers who want their package within 30 minutes may be prepared to pay a premium of say $15 to $20 per delivery. Irrational for a book that costs $18, but as behavioral economics shows humans do not always act rationally.

During a 15 hour window (7am to 10pm) one Prime Air drone could potentially make 30 deliveries (absolute maximum efficiency and at a significant stretch).

Assume the drones are fully in service for 360 days per year, this will be the equivalent of 10,800 deliveries per drone.

The drones will require 2 full time pilots. With drone pilot wages ranging between US$13 to US$23 per hour, plus fulfillment center costs, insurances, drone fees and service, the Prime Air Team overheads and development – the annual fees per Prime Air drone service – annual cost per drone could be a minimum of between US$105,000 to $186,000 per year.

Those numbers divided by the maximum number of deliveries per drone indicate that the Prime Air service could cost Amazon between $9.75 and $17.44 per delivery, which is okay if Amazon get a premium rate for 30 minutes delivery.

Amazon will want to get maximum number of deliveries and efficiencies out of the drone capabilities, whilst reducing the costs as close to $2 per delivery as possible and maximizing the revenue by providing the wow factor to customers. They will also be aiming to reduce the US$ 8.829 billion in cumulative shipping losses in the last three years.

At some stage don’t be surprised if Amazon seeks to move into the logistics business. The robots that they are deploying in their fulfillment centers and now with Prime Air Drones, Amazon are clearly building a high quality, high capability logistics service – and ultimately that is good news for consumers.

Photos: Amazon 2013 Annual Report and Amazon Prime Air Q&A

As Helen Greiner, CEO and founder of CyPhy Works says: “The shortest path between two points is as the drone flies.”

Updated: There is an interesting take on this article edited by Business Insider — The 4 reasons Amazon is dead serious about its Drone delivery service.

5 Monday reads in Robotics, Artificial Intelligence and Economics 

Ben Goertzel believes we are just years away from having a robot read the news (South China Morning Post)

Artificial intelligence techniques such as natural-language processing and computer vision will someday revolutionize our world – at least they will help advertisers sell us more: (Gigaom)

The ultra lethal drones of the future and some we have now: (New York Post)

Rodney Brooks cuts through the hype, what robots can and can’t do – people and robots working together; but don’t underestimate the robots: (Wired – Video)

Frances Coppola discusses the “Wastefullnes of automation:” If a small number of people own machines, how will capitalism survive? (Pieria)

The next 5 years for Drones

Helen Greiner who co-founded iRobot 14 years ago spoke yesterday at the DEMO conference. Helen is now the co-founder and CEO of CyPhy Works, a startup developing flying robots or drones (not quite Unmanned Systems) for industrial applications. In her brief DEMO Labs talk (see video below), Helen takes us through the next five years of drones — from hobbyist toys to industrial surveillance and retail delivery. Helen indicates: “The next wave of robots will be flying robots.”

CyPhy Works

As Helen says: “Anywhere it is hard to get eyes to the right places, that is a good job for drones”

Drones buzzing towards a $400 billion market

Development of unmanned aircraft vehicles (UAVs) or unmanned aircraft systems (UAS), more commonly known as drones, is one of the fastest-growing and, yet, controversial sectors of aerospace, yet it is Black Hornetforecast that it could be worth as much as $62 billion a year to the global aerospace industry by 2020, creating hundred of thousands of jobs. The civilian drone market alone is possibly worth more than $400 billion according to a UK research project backed by the government and top aerospace companies.

With such market potential and possible uses for drones, much attention is currently being paid to the challenges of making them smaller, known as micro-air vehicles or MAVs, such as the tiny reconnaissance helicopters being used by the British Military (and also under review by the US Army) to the development of small drones, which mimic the flight action, and the maneuverability, of birds and insects.

Over the next few weeks I’ll be writing about the Small UAVs, such as the T-Hawk, Raven, Dragon Eye, Shadow, Scan Eagle, Silver Fox, Manta, Coyote, Hummingbird and Super Bat, but first let’s take a look at a very special small UAV which is being very effectively used in military operations and will soon be extended to search and rescue, police and fire-services and may other commercial applications.

Reconnaissance helicopters

In February last year the British army revealed its Black Hornet Nano Unmanned Air Vehicle developed by a small Norwegian company just outside Oslo, Prox Dynamics, headed by inventor Petter Muran. The Black Hornet Nano Unmanned Air Vehicle measures around 4 inches by 1 inch (10cm x 2.5cm) and weighs as little as 16 grams, it is equipped with up to 3 tiny camera’s which gives troops reliable full-motion video and still images, essential for reconnaissance and situational awareness. The system also has an advanced radio link and fully integrated GPS, as well an autopilot system.

It was developed as part of a GB £20 million ($32.8 million) contract for 160 units, or (GBP 125,000, US$ 205,000 each).

The UK Minister for Defence Equipment, Support and Technology, Philip Dunne, has indicated:

Intelligence, surveillance and reconnaissance systems are a key component in our 10-year equipment plan. Black Hornet gives our troops the benefits of surveillance in the palm of their hands. It is extremely light and portable whilst out on patrol.

I’ve added a video of Petter Muran demonstrating and describing the incredible technology in the Black Hornet Nano at the end of this post, it is simply a fabulous device and I can imagine it will be used in many domains as the price comes down.

The system has proven very effective for the British Army and subsequently the US Army  announced that they have contracted Prox Dynamics with a $2.5 million project to provide a modified version of the Black Hornet Nano.