Forecast

Will Amazon crush its rivals with an 'army of robots'?

In a bid to streamline its operations, the online retail giant staffs its warehouses with a fleet of "speedy cyber-mules"

"In the battle between man and machine, the robots just scored a victory in the world of e-commerce," says John Letzing at The Wall Street Journal. Amazon is forking over $775 million to buy Kiva Systems, a manufacturer of zippy orange robots used to ferry products around warehouses the size of football stadiums. (Watch a demonstration video below.) The acquisition is part of Amazon's push to expand its e-commerce empire and maximize efficiency at shipping hubs. Is enlisting an "army of robots" a smart move?

Absolutely. Amazon should have done this long ago: "The only surprise about Amazon's move" to buy Kiva "is that it didn't come sooner," says Keith Wagstaff at TIME. Amazon will have 69 distribution centers "up and running by the end of the year," and the robots will help reduce labor costs and the time it takes to send millions of packages around the country. It's certainly an expensive investment — on top of the initial $775 million price tag, it will cost as much as $20 million every time Amazon wants to "install a system with 1,000 robots in a large warehouse." But Amazon is wise to "eat the high installation costs and hope it pays off over time."
"Amazon's $775 million acquisition of Kiva Systems could shift how businesses see robots"

Amazon will even make a profit off its competitors: Kiva's robots are used by lots of companies, "including Staples, Gap, and Walgreens," says Scott Tilghman at Barron's. Now that Amazon owns all those robots, its competitors will generate "an alternative revenue source," paying Amazon for the privilege of using its product-ferrying machines.
"Amazon and Kiva will click well together"

But a win for robots is a loss for humans: Amazon promises this move won't result in layoffs, since humans will continue to package and ship the products brought to them by robots, says Joseph N. DiStefano at The Philadelphia Inquirer. But how long will it be before Amazon's warehouses are transformed into "dark, box-mining caverns crossed by speedy cyber-mules tracking, racking, and toting from trailer to truck"? A full-size Amazon distribution center currently employs 1,000 full-time workers, and "a few thousand temps for the Christmas shopping rush." That's a lot of jobs, and clearly, they won't last forever.
"Amazon acquiring Kiva: Who let the robots in?"

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