More research,
The following is just my opinion and attempt to understand the market for Sigma's prodcuts and its relative value.
I was searching through various vendors of DVD products on the internet and the only DVD MPEG-2 Decoder board I saw under $1400 was Sigma's Hollywood. Many of the sites stated that this product was the leader of its market segment.
I also saw an estimate by Microsoft and a publication that estimated DVD-Rom enabled computers would be 14-15 million by Christmas of this year.
As I see it, the only way to play movies on a DVD-Rom is to buy an MPEG-2 decoder. As stated above, the only reasonably priced decoder I've found is Sigma's.
The MPEG-2 Decoder's I've seen had a low price of around $250. Would it be safe to assume the selling price of the decoders to the vendors would be $100 on the low side?
So, IMO, what we have here is a $100 unit in a potential market of $14-15 million units for a company that is priced $40 million. Using these assumptions, Sigma would double its sales, I think, by selling 40,000,000/1,400,000,000 = .029 or close to 3%!?! Are my assumptions right here? From the research I've done, I would think Sigma could sell to 3% of the market this year fairly easily, but I could be wrong.
On the down side, what's up with the class action suit I've seen on the news? What is the potential downside to this company?
Grant |
