Thu, Aug. 13, 6:09 PM
- After previously aiming for a fall launch, Apple (NASDAQ:AAPL) is now looking to bring its Web TV service to market in 2016, Bloomberg reports. The delay is blamed on slow-moving licensing talks with TV networks such as CBS, NBC, and Fox, and the need for network capacity upgrades.
- Re/code previously reported Apple's service might not launch until 2016 or late 2015. More recently, BuzzFeed reported the service wouldn't be announced at Apple's September iPhone event; a new Apple TV set-top is expected.
- Bloomberg's sources suggest Apple wants to charge ~$40/month for its service. Dish's Sling TV service provides a limited number of channels for $20/month, while Sony's more expansive PlayStation Vue service goes for $50-$70/month.
- Regarding network capacity, Apple (unsurprisingly) wants to improve quality and keep bandwidth costs down by using CDNs to stream content from data centers that are close to users. The company has been building out its own CDN, and also continues to heavily use market leader Akamai's (NASDAQ:AKAM) services.
- In other news, a federal appeals court has turned down Samsung's request to review the 2012 infringement verdict won by Apple in a California court. Samsung was originally ordered to pay over $1B, but that figure was later cut to $548M. The case will now go back to the California court to determine how much Samsung has to pay.
Thu, Aug. 13, 12:11 PM
- A federal appeals court (the CAFC) has reinstated a $45M infringement verdict against Limelight (NASDAQ:LLNW) in a suit filed by larger rival Akamai (AKAM +0.1%) over the alleged infringement of a patent related to media content delivery.
- The ruling vacates a May decision from the CAFC declaring Limelight didn't directly infringe Akamai's patent. The Supreme Court ruled in 2014 Limelight couldn't be held responsible for inducing infringement by users. However, the CAFC states today Limelight's control over its users makes it responsible for any infringement that occurs.
- Many tech companies have backed Limelight, arguing an Akamai win could open the door to numerous frivolous suits from patent trolls alleging induced infringement. Limelight has tumbled below $3.
- Update (12:39PM ET): Limelight is now down 18.6%.
Wed, Jul. 29, 9:13 AM
Tue, Jul. 28, 5:35 PM
Tue, Jul. 28, 5:06 PM
- While its Q2 revenue was in-line and EPS missed by just a penny, Akamai (NASDAQ:AKAM) has guided on its earnings call for Q3 revenue of $543M-$555M and EPS of $0.56-$0.58, below a consensus of $565.1M and $0.62.
- Forex had a 4% impact on Q2 sales growth. U.S. revenue +16% Y/Y to $399M; international +7% to $142M (+22% exc. forex). Media Delivery revenue +12% to $244M; performance/security solutions (higher-margin) +15% to $256M; service/support +14% to $41M. $63M was spent on buybacks.
- Shares have tumbled to $66.00 in AH trading.
- Q2 results, PR
Tue, Jul. 28, 4:03 PM
Mon, Jul. 27, 5:35 PM
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Tue, Jun. 9, 12:11 PM
- Following a lack of Apple streaming TV service announcements at the company's WWDC conference, Macquarie's Kevin Smithen has downgraded Akamai (NASDAQ:AKAM) to Neutral.
- Smithen: "We believe that investor expectations regarding the second half, 2015 revenue benefit to AKAM from an Apple streaming ramp have been rising in recent weeks and we are now expecting that this will be more of a 2016 opportunity for AKAM and the CDN industry, with an emphasis on second half, 2016 ... We do believe that AKAM will carry most of Apple's streaming traffic and that it will see media revenue reacceleration and margin expansion in 2016..."
- He also expects a weak Q2 for the CDN market in general due to "an absence of notable gaming and software launches, tough World Cup soccer comparison, and currency exchange rates." Akamai rival Limelight (LLNW -1%) is off moderately.
- Ahead of WWDC, Re/code reported Apple is holding off on officially announcing its TV service until it can finalize content deals. Meanwhile, Bloomberg reported yesterday Apple is building a fiber network to connect its data centers, and thereby strengthen its internal CDN. Apple has been known for a while to be building a proprietary CDN to handle some of its content delivery; Akamai nonetheless continues to handle a large portion of it.
Wed, May 13, 12:19 PM
- Limelight's (LLNW +1.5%) CDN services didn't directly infringe a patent owned by rival Akamai (AKAM) since it didn't carry out all of the patent's steps, a federal appeals court has ruled.
- The case had been remanded to the appeals court by the Supreme Court, after the latter ruled in Limelight's favor last year (thereby overturning a guilty verdict from the appeals court). Specifically, the S.C. ruled Limelight can only be held liable for directly infringing a patent, and not for inducing infringement by users.
- Many tech giants have backed Limelight in the dispute, arguing an Akamai victory could lead to a deluge of frivolous suits from patent owners alleging induced infringement.
Wed, Apr. 29, 3:39 PM
- Down sharply in AH trading yesterday after providing soft Q2 guidance to go with in-line Q1 results, Akamai (AKAM -1%) has erased most of its losses with the help of an upgrade to Buy from Deutsche. The firm has hiked its target by $6 to $79.
- Deutsche: "[W]e see the nearterm capitulation in the stock as an attractive entry point into secular growth drivers in FY16+ in Cloud Security and Media Delivery ... FY16+ growth drivers for AKAM's Media Delivery business in Internet HD and 4K Video Streaming, Multi-Player Gaming, etc. 2016 is also like to see meaningful spikes in Internet Web and Video traffic from the Summer Olympics, etc."
- On its CC (transcript), Akamai estimated a strong dollar will have a $3M impact on Q2 sales relative to Q1, and a $22M impact relative to Q2 2014. The company also noted it spent $67M in Q1 to buy back ~900K shares at an average price of "just over $67."
Tue, Apr. 28, 5:03 PM
- Akamai (NASDAQ:AKAM) has guided on its Q1 CC for Q2 revenue of $532M-$547M and EPS of $0.55-$0.59. The former is below a $544.8M consensus at the midpoint; the latter is entirely below a $0.63 consensus.
- As is the case for many other tech companies, a strong dollar has taken a heavy toll on the CDN leader: Q1 revenue growth was 20% Y/Y in constant currency, and 16% in actual dollars. International revenue rose 21% in constant currency, and 7% in actual dollars to $137.6M. U.S. revenue rose 20% to $389M.
- Media delivery revenue (lower-margin, affected by Apple's CDN buildout) rose 12% to $241.8M; performance/security solutions (higher-margin) rose 21% to $245M, and service/support solutions 12% to $39.7M.
- Shares have fallen to $71.00 AH. They went into earnings just $1.24 away from a high of $77.31.
- Q1 results, PR
Tue, Apr. 28, 4:03 PM
Mon, Apr. 27, 5:35 PM
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Mon, Apr. 6, 4:11 PM
- Akamai (NASDAQ:AKAM) has acquired Octoshape, a Danish provider of services that optimize and efficiently deliver IP video content, whether IPTV streams from pay-TV providers or over-the-top (OTT) video services (e.g. Netflix, YouTube). Terms are undisclosed.
- Octoshape asserts its use of a proprietary implementation of the UDP protocol (as compared with the more widely-used TCP protocol) helps it improve streaming speeds and lower startup/buffering times, and that its multicast solutions help keep costs down. The company has 40+ employees, and counts CNN, CBS, IBM, BP, and the NBA among its customers.
- Akamai, which already handles plenty of video streams through its CDN, states Octoshape will provide it with "valuable technology and experience in the area of streaming video optimization," and help it "provide customers with the most comprehensive suite of video delivery and optimization technologies." With video deliver historically a lower-margin business for the company, Octoshape might also help Akamai upsell video clients on higher-margin services.
- The deal follows Akamai's March acquisition of DNS tech developer Xenocode.
Mon, Mar. 16, 6:19 PM
- Pac Crest's Chad Bartley: "We believe traffic growth is accelerating slightly in Q1. This should drive results near the high end of guidance and above consensus."
- Nonetheless, Bartley is maintaining a Sector Perform rating on Akamai (NASDAQ:AKAM) due to valuation concerns. Shares rose 1.8% in regular trading today, making new highs in the process. They rallied last month after Akamai beat Q4 estimates and offered in-line Q1 guidance in spite of major forex headwinds.
Tue, Mar. 3, 12:11 AM
- Akamai (NASDAQ:AKAM) has acquired Xerocole, a developer of technology (referred to as intelligent recursive DNS) that speeds the rate at which domain name servers are able to translate Web site/URL requests into IP addresses. Terms are undisclosed.
- Akamai exec Rick McConnell: "We see this acquisition as an important investment in engineering talent and technology that is intended to complement our DNS product portfolio and strategy. We believe that Xerocole has some of the best DNS experts in the industry and that recursive DNS has strategic value to the Akamai Platform and to each of our business units."
- The purchase is the latest in a string of acquisitions Akamai has made to bolster its value-added (non-commodity) CDN service portfolio. Others: Prolexic, Verivue, Blaze.
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