Could Amazon Be on the Brink of a Huge Mistake?

[Elderberry]

The Motley Fool By Rich Smith – Nov 19, 2022

Key Points

•  Amazon.com has permission to launch 3,236 Kuiper satellites to provide internet broadband service from space.

•    There's just one catch: Amazon needs to have half the work done by 2026 -- and so far, it hasn't launched a single satellite.

•  Now, Amazon is contemplating asking SpaceX -- currently the biggest player in satellite internet -- to help launch Amazon's satellites.

Amazon wants to spend $10 billion to build its own satellite constellation -- and may have to pay SpaceX to help.

Amazon.com (AMZN -0.75%) is making a big mistake -- and no, I'm not talking about its plan to lay off 10,000 workers, announced earlier this week.

As my fellow Fool Jeremy Bowman explained on Monday, CEO Andy Jassy's plan to right-size Amazon's workforce holds the potential to save the internet retailer as much as $1 billion a year in salaries -- which is great. Unfortunately, $1 billion is peanuts in light of the potential $10 billion in cash that Amazon wants to throw into an ill-considered effort to compete with SpaceX in satellite internet.

SpaceX is the company to beat

SpaceX didn't invent the idea of transmitting broadband internet from space. Other companies like Hughes, Viasat, and Iridium were doing satellite-based internet long before SpaceX came on the scene. But SpaceX has inarguably made the biggest splash in this business, launching more than 3,500 Starlink satellites into orbit over the past two years (of which approximately 92% remain in service today). 

Amazon's slow start

According to documents filed with the Federal Communications Commission, Amazon aims to launch 3,236 KuiperSats into orbit. Amazon has enlisted an army of rocket launch companies to help it with this project -- everyone from Boeing and Lockheed Martin to Airbus, Blue Origin, and start-up space firm ABL.

And yet, Amazon hasn't yet begun launching KuiperSats with anyone -- and the clock is ticking. In order to meet the conditions of its FCC license, Amazon must put half its 3,236 satellites (so 1,618) into orbit by the end of 2026. Current plans are for the first two satellites to go up aboard the inaugural United Launch Alliance (ULA) Vulcan Centaur flight, scheduled for early next year. 

Depending on the kindness of strangers

Amazon may have a solution to this problem, but it's a bit off-the-wall. While ULA is averaging only six launches per year, SpaceX has conducted more than 50 launches so far in 2022 alone. Last month, Amazon Senior VP for Devices and Services Dave Limp suggested Amazon might consider hiring rockets from SpaceX to help it meet its goal.

Maybe Amazon's best move at this point is to just cancel Project Kuiper and quit while it's behind.

More: https://www.fool.com/investing/2022/11/19/could-amazon-be-on-the-brink-of-a-huge-mistake/

Amazon needs to launch half of their satellites by July 2026

[libertybele]

I don't like how Amazon dominates now and I'm not thrilled with their satellite endeavor.

[roamer_1]

I don't like how Amazon dominates now and I'm not thrilled with their satellite endeavor.

I can't very easily remove them from my life, though I have greatly diminished their influence. The same with big box stores. I am trending first to mom and pop as much as I can - Though sometimes the cost is so much more as to be ridiculously painful... Whereupon I will normally opt for an online or big box solution. But mom and pop gets first swing, and local gets second.

[Cyber Liberty]

Amazon asking SpaceX to help?   

[libertybele]

I can't very easily remove them from my life, though I have greatly diminished their influence. The same with big box stores. I am trending first to mom and pop as much as I can - Though sometimes the cost is so much more as to be ridiculously painful... Whereupon I will normally opt for an online or big box solution. But mom and pop gets first swing, and local gets second.

I try to patronize the mom and pop stores as well, but they are very few and far between around here. There is rumor of Kohl's going out of business, so other than Target or Wallyword, where are people going to get clothing? The few boutiques around here shut down and there were a couple out on Sanibel Island but they are pretty much destroyed.

During the pandemic people didn't leave their homes to shop and Amazon delivered whatever was needed.  They grew and mom and pops diminished.  It's such a shame.

Think back when we had stand alone brick and mortar stores and they then all migrated to shopping malls.  Now the malls are closing up because there aren't even enough stores to keep a mall open.

I am no longer for continued progress; perhaps I am just old fashioned. I'd rather go to the store and shop.  I don't enjoy shopping on line. With Kohl's closing, the only way I will be able to get clothing is either at Target which has a very limited selection or Wallyworld which has a limited selection as well. Buying clothes on line?  You can't see or feel the quality and you sure as heck can't try them on. I prefered going to the movie theaters rather than watching it on TV, but the theater around here has jacked their prices up.  We used to be able to see a movie for $4.99 a ticket ... now it's not worth the money to go out. Our screen isn't as large as the one in the theaters, but it'll do.

Also take computers and cellphones -- all have replaced numerous jobs and most people have their cellphones attached to their hips.  Lots of people work remotely now; which brings us to people not going into the office or a workplace so there isn't physical interaction with people.

The supermarkets now have self-check out lanes so there isn't even interaction with cashiers; though they still have some cashiers.  I prefer writing a check (yep I hold up the line for a couple of minutes) and talking to the cashier.  My Home Depot and Lowe's is still open - I like going into the garden section mostly.

What about the new AI intelligence which will replace human interaction all together?

Sorry to rant, but progress IMO has greatly diminished our quality of life.

Take me back to the days when I was a kid running around catching fireflies.

[roamer_1]

I try to patronize the mom and pop stores as well, but they are very few and far between around here. There is rumor of Kohl's going out of business, so other than Target or Wallyword, where are people going to get clothing? The few boutiques around here shut down and there were a couple out on Sanibel Island but they are pretty much destroyed.

During the pandemic people didn't leave their homes to shop and Amazon delivered whatever was needed.  They grew and mom and pops diminished.  It's such a shame.

Think back when we had stand alone brick and mortar stores and they then all migrated to shopping malls.  Now the malls are closing up because there aren't even enough stores to keep a mall open.

I am no longer for continued progress; perhaps I am just old fashioned. I'd rather go to the store and shop.  I don't enjoy shopping on line. With Kohl's closing, the only way I will be able to get clothing is either at Target which has a very limited selection or Wallyworld which has a limited selection as well. Buying clothes on line?  You can't see or feel the quality and you sure as heck can't try them on. I prefered going to the movie theaters rather than watching it on TV, but the theater around here has jacked their prices up.  We used to be able to see a movie for $4.99 a ticket ... now it's not worth the money to go out. Our screen isn't as large as the one in the theaters, but it'll do.

Also take computers and cellphones -- all have replaced numerous jobs and most people have their cellphones attached to their hips.  Lots of people work remotely now; which brings us to people not going into the office or a workplace so there isn't physical interaction with people.

The supermarkets now have self-check out lanes so there isn't even interaction with cashiers; though they still have some cashiers.  I prefer writing a check (yep I hold up the line for a couple of minutes) and talking to the cashier.  My Home Depot and Lowe's is still open - I like going into the garden section mostly.

What about the new AI intelligence which will replace human interaction all together?

Sorry to rant, but progress IMO has greatly diminished our quality of life.

Take me back to the days when I was a kid running around catching fireflies.

I will agree with all of that @libertybele ... We still have a Target (I think) and Penny's, But I have missed KMart ever since it left. I buy most of my clothes at the ranch store (Murdoch's) anymore. That's most of the outerwear, Carhartt jeans and overalls... Still having trouble sourcing good, thick flannel shirts...

And since Penny's public apology and promise to bring back their long supported brands, I have been getting around to some there too... Though their Big Mac flannel shirts - Long my go-to - are skinny crap.

So I guess Duluth Trading Co gets a little more of my business. Moving away from Carhartt for Duluth...  Gonna try Duluth for flannel... Already hard core Duluth for underwear and t-shirts. Their stuff is bulletproof. Even if it is online and I can't try it on. Once you know what you want, their products are consistent, so online is pretty painless.

But I also see the interaction thing. Pre-Covid, I would mostly do cash transactions, and barely used the bank. COVID forced me into a debit card and paying online... Where I used to go around and pay my bills in cash, and give all the ladies at the bank and utility companies a little hustle, and run into folks to bulshalate... I can very easily be an introvert, and function perfectly. But there is a gregarious side to me that goes wanting. And I miss that.

I had recently decided to go back to the old way... I need a lot more money in the bank now, to cover online orders (pooter parts will always be online, and most automotive and appliance parts too), I need to drag most of it out (or never put it in), and go back to Benjamins. Then I will get that walk around to say hey to everyone... And probably stop for lunch along the way at my favorite diner...

You are right - Quality of life requires that interaction. And I am a poorer man without it. 

[GtHawk]

I will agree with all of that @libertybele ... We still have a Target (I think) and Penny's, But I have missed KMart ever since it left. I buy most of my clothes at the ranch store (Murdoch's) anymore. That's most of the outerwear, Carhartt jeans and overalls... Still having trouble sourcing good, thick flannel shirts...

And since Penny's public apology and promise to bring back their long supported brands, I have been getting around to some there too... Though their Big Mac flannel shirts - Long my go-to - are skinny crap.

So I guess Duluth Trading Co gets a little more of my business. Moving away from Carhartt for Duluth...  Gonna try Duluth for flannel... Already hard core Duluth for underwear and t-shirts. Their stuff is bulletproof. Even if it is online and I can't try it on. Once you know what you want, their products are consistent, so online is pretty painless.

But I also see the interaction thing. Pre-Covid, I would mostly do cash transactions, and barely used the bank. COVID forced me into a debit card and paying online... Where I used to go around and pay my bills in cash, and give all the ladies at the bank and utility companies a little hustle, and run into folks to bulshalate... I can very easily be an introvert, and function perfectly. But there is a gregarious side to me that goes wanting. And I miss that.

I had recently decided to go back to the old way... I need a lot more money in the bank now, to cover online orders (pooter parts will always be online, and most automotive and appliance parts too), I need to drag most of it out (or never put it in), and go back to Benjamins. Then I will get that walk around to say hey to everyone... And probably stop for lunch along the way at my favorite diner...

You are right - Quality of life requires that interaction. And I am a poorer man without it. 

@roamer_1
Sticking my nose in, but have you ever tried the Duluth Trading Company, I can only go by what I have heard but their products are said to be quite good, one day I will find out. Here is a link to their Flannels https://www.duluthtrading.com/flannel/?feature=mndb2

[roamer_1]

@roamer_1
Sticking my nose in, but have you ever tried the Duluth Trading Company, I can only go by what I have heard but their products are said to be quite good, one day I will find out. Here is a link to their Flannels https://www.duluthtrading.com/flannel/?feature=mndb2

Yeah... 3rd paragraph of the post you responded to. 

I can certainly add my recommendation with experience. I have been in their T-shirts for a long time now.... And their Buck Naked underwear - Expensive, I know, but they wear like iron. and the wicking is no false claim. Had some of them for years and they're still going strong.

Just starting on their Firehose Pants and the next time I do insulated bibs and coats, it will probably be theirs... Carhartt is getting spendy and the quality is leaving.

So yeah... Duluth Trading is all that. And them that can brag, let em. 

[Sighlass]

Unfortunately I have used Amazon way more than I should have... They have silenced my reviews after a gun holster purchase, so I am ticked at them and have stopped using them... I probable made 4-5 purchases a week, but no more. Mostly little stuff like hardware and tools, but things like Rare Earth Magnets and my electric wood splitter were purchased there. I found a lot of good deals over the years, last great deal I got was TEN 7and1/4" saw blades for 12 dollars (not each, but all 10).

[roamer_1]

Unfortunately I have used Amazon way more than I should have... They have silenced my reviews after a gun holster purchase, so I am ticked at them and have stopped using them... I probable made 4-5 purchases a week, but no more. Mostly little stuff like hardware and tools, but things like Rare Earth Magnets and my electric wood splitter were purchased there. I found a lot of good deals over the years, last great deal I got was TEN 7and1/4" saw blades for 12 dollars (not each, but all 10).

Thursday is my online order day... Somewhere between 20 and 30 items generally for the business, not to mention personal items. 2/3rds to 3/4ths of that is right out of Amazon. I could knock that down some developing relations with primary warehouses... and I am doing so... But generally speaking there is no profit in it, and will probably cost more, and without as much efficiency... not to mention having to go to 5-10 different places instead of the one.

Don't get me wrong. I AM moving away from Amazon. But it ain't going to be easy or soon.