Acme Packet Inc.APKT

Stock Research and Analysis

by Alex Dannin

Acme Packet has emerged as the leading supplier of a key telecommunications device known as a session border controlleran, or SBC. This equipment facilitates the delivery of both voice and video services over data networks. Unlike many young tech companies, Read more

Bulls Say

Acme Packet's comprehensive approach to the rapidly growing SBC market and its ease of interoperability with other vendors' equipment has allowed the firm to carve out a leadership position.

The company's distribution partners read like a who's who list of the telecom equipment world and include Ericsson, Alcatel Lucent, Motorola, Nokia Siemens, and Nortel.

An emphasis on software, combined with the use of off-the-shelf hardware components, gives the firm softwarelike gross margins in the 70%-80% range.

Given the ongoing consolidation in the telecom equipment market, Acme could be viewed as a takeover candidate by a larger competitor looking to compete in the high-growth SBC niche.

According to industry research, most telecom carriers prefer that SBCs remain separate devices. Read more

Bears Say

Acme Packet operates in a competitive environment against companies such as Cisco, Juniper, and Sonus, all of which have greater financial resources and broader distribution channels.

Manufacturers of routers and switches are working to incorporate many of the functions performed by Acme Packet's appliances into their own products.

Demand for telecom equipment can be very cyclical. Read more

Strategy

Using a niche strategy, Acme Packet is focused exclusively on supplying best-in-class session border controllers. By not diversifying onto other network elements, it has been able to form key distribution Read more

Management

Acme Packet was founded in 2000 by Andy Ory, the CEO, and Patrick MeLampy, the chief technology officer. Prior to Acme Packet, Ory founded Priority Call Management, a maker of prepaid calling and messaging technologies. Ten years later, Ory sold Priority Read more

Profile

Acme Packet is a leader in the session border controller market with approximately 50% market share. Acme's product consists of proprietary software sitting on a generic Read more

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