Analyst: Apple needs Akamai even with their own content delivery network

“Akamai Technologies will gain from soaring data consumption driven by online video as well as selling more products to existing customers, says Pacific Crest Securities, which resumed coverage of the content delivery network provider with an overweight rating,” Reinhardt Krause reports for Investor’s Business Daily.

“Pacific Crest analyst Michael Bowen also said in a research report that he expects upside from Apple’s launch of a Web TV service,” Krause reports, “though timing is uncertain and though Apple reportedly is building its own CDN.”

Apple is reportedly building out its own CDN network for its own benefit as the company has a new streaming music service and could add a streaming video service. We believe that Apple has used Akamai’s CDN capabilities in the past, and while Apple could be building out its own CDN, we believe that Apple could continue to be a customer for Akamai, especially during large software updates that require significant scale that its own CDN may not yet be able to handle. — Pacific Crest analyst Michael Bowen

Krause reports, “Bowen’s price target of 91 is 20% above Akamai’s closing price Wednesday of 73.06.”

Read more in the full article here.

MacDailyNews Take: It will likely take some time for Apple to build out a robust CDN of their own.

iOS 8 release a significant, successful debut for Apple’s new CDN – September 19, 2014
What Apple’s new content delivery network means for so-called ‘net neutrality’ – and for you – August 19, 2014
Apple’s content delivery network now live; paid interconnect deals with ISPs, massive capacity in place – August 1, 2014
Apple’s content delivery network is reportedly live and it’s positively massive – July 31, 2014
Apple negotiating paid interconnect deals with ISPs for their own Content Delivery Network – May 20, 2014


  1. If I understand this correctly, Apple has yet to begin building anCDN. What they have in Maiden, NC, as well as elsewhere, are data centres, which allow storage of massive amounts of data, with the ability tobaccos that data efficiently and quickly.

    Content delivery network is a — you guessed it — a network! It is a global collection of servers connected to fat internet pipes that provide bandwidth for large volume of data. Companies such as Akamai have been investing in such infrastructure, deploying servers that provide storage and analise traffic for congestion and efficiency throughout the globe.

    It is possible that apple might decide to build their own CDN. for now, they use other commercially available ones.

    1. Apple first used their own CDN for the release of iOS 8 last year, but still relies on third-party solutions for much of their needs. There were reports on the Apple sites about how the release of iOS 8 was the first test of Apple’s new CDN.

  2. I think Apple could have taken that $120 billion of share repurchases they threw away and built or bought themselves a pretty large and private CDN. I guess it all has to do with priorities.

    Akamai has a market cap of about $14 billion so I think Apple could have simply purchased Akamai if it really wanted a CDN that badly. Now, instead of owning a CDN with some of that $120 billion, they have $120 billion worth of basically nothing. From my narrow viewpoint, owning Akamai would have been a plus on the books and not a negative.

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