With the earnings coming out tomorrow, it might be an opportune time to mention Tesla and how it is disrupting the car industry. However, this article is not about them. There is a new player in town and it will be a game changer.
Even before this announcement, I thought the traditional automakers were cooked. This just reaffirms it.
When one of the most powerful, and innovative, companies enters your industry, it is time to take notice. Of course, few are really looking at this right now but, in a few years, it will be obvious.
Zoox is a self driving start up that is making enormous headway with image recognition technology. In fact, when it comes to computer vision, it is considered by many to be one of the leading companies in the world for this.
It was a company that was recently sold for $1.2 billion. The company who purchased it is none other than Amazon.
Forget Tesla, Amazon is the big fish in the industry now.
Thus, we have Amazon, Tesla, and Google (Waymo), all working on self-driving technology. Where does that leave the existing automakers? It does appear at the first turn, they are nowhere to be seen.
Why would Amazon get involved in this? There reasons are two-fold.
To start, image recognition technology is vital going forward. This does not only apply to self driving cars but a host of applications going forward. Having computers with vision means huge money. It also can be applied to any field such as, say, their grocery stores.
The other reason why this makes a lot of sense for Amazon is they are on tap, in the next couple years, to deliver more packages than both FedEx and UPS combined. This means they are aching to reduce the cost of package delivery. Presently, they own vans operated by humans. As we all know, humans are a cost a company like Amazon is seeking to eliminate.
They already filed a number of applications for patents relating to drone delivery. This is another area the computer vision technology can be of benefit. Taking package delivery to the air will help to speed things up and save a ton of money compared to the Earthbound counterparts.
Part of the debate about autonomous vehicle technology and who is leading, Tesla or Waymo, came down to the approach taken. Musk was all in from the start on cameras. Waymo went with LIDAR. Over the past 5 years, the price of camera dropped a great deal while the image recognition software improved significantly.
Now Amazon is in the game with camera technology also.
My view is the traditional automobile manufacturers are Nokia in a smartphone world. They are still interested in making the same cars that were in their line up for decades. Considering we live in a world of software, this is a strange position to take.
Amazon is a full-blown technology company. When they enter an arena, it is usually just one stop along the way. As we see, this technology they just acquired is going to be used in many different areas. This will only help to further the Amazon brand.
So while Tesla announces their second quarter earnings, Amazon is now in the game. Many feel this is putting a target on Tesla but it is the traditional companies that have the bullseye on their chests.
In the past I noted that there are two types of companies going forward: technology and those going out of business.
Traditional automakers still believe they are car companies. This means they are going out of business.
If Tesla was not disruptive enough, now Amazon is breathing down their necks.
In an era of "robotaxis" Amazon is perfectly positioned to take advantage of this. All automobiles on the road can be summoned through the Amazon application, which is already on tens of millions of phones. Even if ownership does persist, Amazon.com is a built in dealer network. If Tesla can sell cars online, so can Amazon.
For anyone who didn't think the automobile industry was changing, this move proves it. Amazon does not enter an industry with the idea of keeping it the same.
Tesla caused some major disruption for the traditional car makers; Amazon might have just killed them off.
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