- Wells Fargo's Gray Powell isn't concerned about the impact of Apple's reported CDN buildout on Akamai (AKAM -3.5%), which is believed to have generated ~$100M in 2013 sales from the tech giant.
- Powell notes Akamai is already estimated to have recently taken a $24M/year revenue hit from renegotiating its Apple CDN contract, and that the company is expected to generate 2014 revenue of $1.8B.
- After factoring the impact of the price cut, Apple's reported move might only put ~5% of Akamai's revenue at risk. Moreover, the gross margin on that revenue is likely lower than Akamai's overall gross margin, given it involves basic media delivery services.
Wells Fargo defends Akamai, says Apple CDN impact limited
Feb 3 2014, 18:40 ET