I have also held SSPIF since 1996 and I will admit my initial purchase was a mistake in that I followed the much flawed "buy first, research later" philosophy. As I learned about the company I began thinking that I had been tipped-off to a diamond-in-the-rough and bought more shares, until very recently, as the stock began tanking. Recently, I have started to think that this stock is lighter in the diamond and heavier in the rough and I have begun to re-evaluate my research in this company lately. I agree that DSP growth over the next 5 years will be nothing short of explosive as 'intelligent appliances' will replace the PC as the chief information collector/entertainment provider in the future and everyday 'things' become smarter (i.e. houses, cars, etc). People relate better to 'things' than to computers. Computing will become ubiquitous and DSP's will play a huge role. Virtually everyone knows that DSP will be huge. TI, ADI, MOT, and LU are making sure everyone knows this and our free market economy will ensure that the competition will similarly increase as the importance of DSP solutions become more and more evident. Just because SSPIF is a current player in DSP solutions doesn't mean that they will necessarily be successful. You don't win just by showing up at the game, there are many examples of this, especially in technology. The questions I have with regard to SSPIF are below.
First, Why is SSPIF positioned to win? There are many companies that perform similar functions in the DSP space not to mention in-house competition within large corporations (though this in-house impact is likely diminishing). At TI's 3rd party web site there is a list of over 35 companies with hundreds of development boards. Is SSPIF positioned any better than these other players?
Second, A very significant portion of SSPIF's business comes from two big customers. Consider the following: In 1997 and the first quarter of 1998, the Company's two largest customers accounted for approximately 44% and 34%, respectively, of the Company's sales and the U.S. Government (principally the U.S. Department of Defense), its largest customer, accounted for approximately 25% and 22%, respectively, of the Company's sales. Clearly, given its size, SSPIF is not such a strategic supplier that the US DOD couldn't do without it. What happens if one of these customers (or just US DOD) finds a new DSP solutions supplier or shifts more business to a competing DSP solutions supplier? Why does SSPIF have such a narrow customer base? How and can SSPIF significantly expand this customer base?
These are the kinds questions (among others) that I will be trying to answer over the next week or two before deciding on whether or not to sell my position and lick my wounds. I realize that this business is extremely difficult to understand and much of the technical info is over my head and would, therefore, like to hear what others think of SSPIF's competitive position and its concentrated customer base. Any and all comments are welcome but please don't whine about the stock's performance - performance is a two-way street heading North AND South - as it doesn't help in attempting to evaluate SSPIF's current situation. Thanks.
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