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Could Drone Delivery Really Take Off? Experts Weigh In

When Amazon announced its drone delivery service two years ago, some people were convinced it was a marketing gimmick.
Image: The Prime Air unmanned aircraft project that Amazon is working on in its research and development labs
This undated image provided by shows the so-called Prime Air unmanned aircraft project that Amazon is working on in its research and development labs.Amazon via AP

When Amazon announced its drone delivery service two years ago, some people were convinced it was a publicity stunt.

Now that Google and Wal-Mart have entered the game, the future for the technology looks a little brighter — although not everyone is convinced that it's going to take off.

"I never thought it was a marketing gimmick," Gerald Van Hoy, an analyst at Gartner Research, told NBC News.

On Monday, Google's Project Wing head David Vos said the company hopes that its drones will be delivering packages by 2017. That came on the same day that Wal-Mart asked federal regulators for permission to test its own delivery drones.

Both announcements only bolstered Van Hoy's belief that delivery drones are on their way relatively soon. That opinion, however, is not universally shared.

"At this point, the prospect of drone delivery is more hype than reality," Leslie Hand, vice president of retail insights for market research firm IDC, told NBC News.

What's stopping drone delivery?

Right now, according to the analysts interviewed by NBC News, the biggest obstacle to drone delivery is the lack of federal regulations.

The FAA missed its October 1 deadline, set by Congress, to create national drone regulations. Now the agency says "spring 2016" is its goal.

Without those guidelines in place, operators of unmanned aerial vehicles are flying in a legal gray zone, not the best situation for investing massive amounts of cash in a commercial drone fleet.

According to Julie Ask, a principal analyst at research firm Forrester, Amazon, Google and Wal-Mart need the regulations to be set before they can fully test their drones.

Specifically, they need the FAA to allow some drones to fly beyond the line of sight of their operators —something that might not be allowed in the first set of guidelines.

There are also technical kinks to be considered. These drones have to be able to avoid obstacles, drop off packages without damaging them, and withstand damage from bad weather, animals and vandals.

A video released this week by MIT’s Computer Science and Artificial Intelligence Lab (CSAIL) shows a drone autonomously avoiding obstacles while flying at 30 miles per hour, a good sign for Prime Air and other would-be delivery services.

Companies will also need programs smart enough to coordinate the flying machines from their facilities to customers' houses.

"We believe it will happen," Ask told NBC News of drone delivery, "but not in the next 12 to 24 months given the obstacles."

What drone delivery might look like

If federal regulations are released in spring of next year, Van Hoy can picture Amazon offering the service in a limited form by the end of 2016. That is true even if the FAA doesn't allow beyond-line-of-sight flight. How is that possible?

"When it first gets launched, I would be surprised if drones were leaving the warehouse with packages," he said.

Instead, a truck could take packages to a central location and let four or five drones take packages to nearby homes. That way, they could remain within sight of their operators, and the limited distance would reduce the chance of accidents.

And no, drones probably aren't going to ring your doorbell and hand over a package with robotic arms. Some kind of parachute system limited to backyards might be feasible, Van Hoy said

That means packages would have to be small, which is not a problem, since Amazon has already stated that 86 percent of its current deliveries are under the five-pound-limit that the drones could conceivably carry.

Are drone fleets worth it?

Drones aren't free. Neither is extensive research and development. Earlier this year, investment firm Ark estimated that it would cost around $130 million for Amazon to retrofit its facilities and buy drones for its Prime Air program. Throw in another $350 million for maintenance and operating costs every year.

That's not an insignificant amount of cash — but that is also money Amazon doesn't have to spend on traditional delivery services. Drones would also allow companies to deliver packages more quickly since they wouldn't be limited by routes and schedules of services like UPS and FedEx.

"Everyone is pushing for same day delivery," Van Hoy said. "That’s the Holy Grail."

Customers also would get the benefit of having packages delivered at specified times (a service now performed by start-ups such as Doorman for a fee) instead of waiting all day for a van to pull up at their driveway.

Still, not every company would benefit from spending hundreds of millions of dollars each year for drone delivery ... at least not right now.

"Frankly, retailers have so much on their plates as they transform their businesses to satisfy digitally connected customers, that drone delivery is a merely a future possibility," said Hand from IDC.

The analysts from Gartner and Forrester are more optimistic that these projects will eventually get off the ground. Whether or not they flourish depends on the reception they get once they're in the air.

"There are a couple of ways this can be derailed," Van Hoy said, pointing to major accidents or malfunctions. "If the public is not supportive of it, it’s not going to happen."