The Impact of Bandwidth Explosion on the PC/Server Group Banc of America
Securities Analyst Tells Investors Data Flow Will Flood Central Processing
Units; Applications Will Drive Server and Consumer PC Growth
SAN FRANCISCO, Sep 20, 2000 /PRNewswire via COMTEX/ -- The following is being
issued by Banc of America Securities, a member of the National Association of
Securities Dealers, CRD number 26091:
Total world bandwidth is doubling every four months with major implications for
the corporate and home computing and server industries, according to Kurt King,
senior research analyst at Banc of America Securities.
(Photo: newscom.com )
"Bandwidth outside the PC will soon surpass bandwidth inside the PC," said King.
"Central processing units will be swamped with data flow, and this will have a
major impact on the PC/server group over the next two to five years." The net
effect of exploding bandwidth, King concluded, is that while corporate desktop
demand may be negatively impacted, the demand for more consumer applications and
the drive to build the Internet infrastructure would be a tremendous positive
for consumer PCs and for servers.
King's comments came at the 30th Annual Banc of America Securities Investment
Conference, which runs through September 22 at the Ritz-Carlton Hotel in San
Francisco. The five-day conference features 250 presentations from companies
that are driving the Business Services, Consumer & Retail, Energy,
Entertainment, Media & Telecom, Financial Services, Health Care, Industrial
Growth, Real Estate & Lodging and Technology industries.
Exploding bandwidth is driving the corporate desktop market toward applications
residing on servers either locally or at application service providers, King
noted.
"Desktop revenues continue to show lackluster growth, and the corporate desktop
share of revenue continues to fall," King said. "The vendor mix is shifting away
from corporate desktops with a proliferation of new devices and toward secure
mobile environments."
Although Dell Computer (DELL) is quite exposed to the effects of the bandwidth
explosion, King contends that the company has anticipated this change and has
already shifted focus to corporate enterprise systems and the exploitation of
services across product types.
King noted that demand for digital content in the consumer PC market could be
insatiable, with broadband driving convergence of products, services and
industries. He predicted that in the near future, consumers would likely
purchase a bundle of hardware and beyond-the-box services including appliances,
home networking, digital entertainment, and telephony services.
In the home computer sector, King likes Gateway (GTW). "Their partnership with
AOL, in particular, anticipates changing business models and product sets," he
said. "But Gateway's advantages aren't proprietary, and the game will be a
lengthy one."
King believes that bandwidth growth will propel server growth in the areas of
volume, specialized services and size. He said that long-term winners will scale
up and out with hardware/software integration driving industry consolidation. In
this area, King favors Sun Microsystems (SUNW) and Compaq Computer (CPQ).
Banc of America Securities, a subsidiary of Bank of America Corporation (NYSE:
BAC; PCX; London), is a full-service investment bank and brokerage firm. With
principal offices in San Francisco, New York City and Charlotte, Banc of America
Securities employs more than 4,200 associates in offices around the country and,
with affiliates, offers capabilities worldwide.
Bank of America, with $680 billion in assets, is the holding company for the
largest bank in the United States. It provides international corporate financial
services for more than two million businesses conducting transactions in 190
countries. More corporations, small businesses and consumers use online banking
and investing services from Bank of America than any other financial services
company in the United States. The company's stock ticker is listed on the New
York, Pacific and London stock exchanges, and certain shares are listed on the
Tokyo Stock Exchange.
SOURCE Banc of America Securities
CONTACT: Susan Stanley of Banc of America Securities, 415-913-6892, or
sstanley@bofasecurities.com
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