Could the "Mayday" Button Finally Make Amazon a Major Tablet Contender?

Amazon has for years been battling, and losing, to Apple, Samsung, and others in the tablet market; yet recently Amazon has stepped up its game with the revolutionary "mayday" button, which could finally be what Amazon needs to become a major tablet contender.

Jan 5, 2014 at 7:00AM

Feature Cs 

Source: Amazon

It is no secret that the tablet market is one of the fastest-growing markets in the world. In 2013 alone, the tablet market is projected to grow 53.5% to 221.3 million units according to IDC, the leading tablet industry research firm.

In this report, IDC also says that it expects 22.2% growth in 2014, which will bring the market to 270.5 million units. By 2017, when the market is projected to reach 386.3 million units, the growth rate will dip down into the single digits. Nevertheless, this stretch of growth is truly mind-boggling, especially considering that before 2010 the tablet was not even a major thing.

It is also no secret that several major companies are jockeying for market share in this cut-throat industry, and among the most prominent are Apple (NASDAQ:AAPL) and Samsung. These two companies together dominated half of the market in the third quarter (29.6% and 20.4%, respectfully), while the remaining 50% was controlled by a broad array of companies including Asus, Lenovo, and Acer, none of which held more than 7.4% market share.

In reality, the tablet market is Apple, Samsung, and everybody else, yet Amazon's (NASDAQ:AMZN) recent major strides in product innovation could make the Kindle Fire a force to be reckoned with in the tablet market.

The "mayday" button could change everything
Each quarter, IDC breaks down the tablet industry into the top five and then everyone else. In the first quarter of 2013, Amazon was No. 4 on this list with 3.7% market share. In the second quarter of 2013, Amazon fell out of the top five and into the "others" category. In the third quarter of 2013, the most recent release, Amazon was once again lost in the "others" category. However, with Amazon's newest tablets equipped with the revolutionary "mayday" button, it is very likely that Amazon will once again claim a top five position in the fourth quarter.

What is the "mayday" button? It is "revolutionary on-device tech support" that comes on Amazon's new Kindle Fire HDX tablets, which were released on Oct. 18 and Nov. 7. 

In a nutshell, the user is supposed to hit the mayday button and within 15 seconds will be connected to an Amazon expert who can "co-pilot you through any feature by drawing on your screen, walking you through how to do something yourself, or doing it for you." As Amazon has no physical locations, this is the equivalent of Apple's genius bars, except that the user never has to leave the comfort of their own home and the service is available 24 x 7, 365 days a year. 

Nothing else like it has ever been put on a tablet. Jeff Bezos, Amazon's CEO, called the mayday button "the greatest feature we have ever made."

Customer response to the new feature has been overwhelmingly positive, and on Christmas Day the average response time was just under nine seconds. One customer remarked:

Just tried the mayday button on my hdx. 15 second response has done it again. Thoroughly impressed.

Thus, it comes as no surprise that the Kindle Fire HDX was the best-selling item on Amazon over the Black Friday weekend.

Amazon's revolutionary "mayday" button should at the very least secure the company a top five position for in the tablet market. While competitor innovation is always a major threat in the tablet industry, Amazon, at least for the moment, has a major leg up on the rest.

What is this likely success in the tablet market going to mean for Amazon overall?

At least at first the direct impact will be relatively small, as in 2012 Kindle hardware sales only accounted for 8.38% of overall revenue for the company. Yet as iPad owners know all too well, when someone buys a tablet from a company, they become effectively locked into that company's ecosystem. More sales of Kindle Fire HDX tablets translate into more sales of music, apps, and Amazon Prime subscriptions.

As an overall investment Amazon is a tale of two perspectives. For value-oriented investors the stock is a nightmare waiting to happen. With a P/E currently sitting over 1,000 and a CEO who is disinterested in turning a profit today if that means sacrificing investments in the future, Amazon is an overvalued mess. 

For longer-term growth investors, Amazon is a darling. The company is expected to grow revenue from $61 billion in 2012 to more than $226 billion by 2020, and it has a CEO who understands that fueling tomorrow's growth requires investing today.

My Foolish conclusion
Personally, I believe Amazon is a tremendous long-term investment, as the company is transforming the way the world shops. I believe that sometime down the road Jeff Bezos and the Amazon team will use the company's massive power to turn massive profits, but until then I just have to deal with no to very little actual profit.

On Jan. 30, IDC is expected to release its fourth quarter 2013 tablet report. Investors should look to this as an indicator of the success of the mayday button, as well as Amazon.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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