Sony

Sony Corporation

• Founders: Ibuka Masaru and Morita Akio.
• Distinction: Remade the global consumer electronics marketplace.
• Primary products: Electronic devices, movies, TV shows, recorded music.
• Annual sales: $63.082 billion.
• Number of employees: 189,700.
• Major competitors: Matsushita, Philips Electronics, Time Warner.
• Chairman and CEO: Nobuyuki Idei; President: Kunitake Ando.
• Headquarters: Tokyo, Japan.
• Year founded: 1946.
• Web site: www.world.sony.com.


Three decades ago, American gadget aficionados who wanted a state-of-theart TV always turned to Sony. From the time it was introduced in 1968, the company’s Trinitron picture tube captured widespread acclaim as a superior if costly alternative to competing models that still relied upon an old-style vacuum tube. One of several major Japanese firms that moved aggressively into the U.S. television market when domestic companies diversified into other fields, Sony had long targeted the country for expansion. It accordingly wasted no time in establishing its brand here as a source for high-quality, advanced electronics. The sparkling clear picture on its Trinitron sets helped bring it to the public’s attention.
Sony had been selling compact radios in the United States since the late 1940s. In the 1960s, it added tiny transistorized televisions. Audiotape machines that were popular at home followed, as did the industry’s first consumer appliance for recording and playing videotapes. (Although “Betamax” is now considered one of the company’s great failures, is still regarded by many as superior to the VHS format that ultimately gained the upper hand.) Despite this costly miscue, officials were eager to remain a leading player in the game and soon launched another visionary item that would reach heights of unqualified success and serve as their signature product for years to come: the Walkman personal stereo.

Not content to manufacture just the delivery systems for music, television, and movies, Sony then ventured into the actual production of such media by acquiring some of the world’s leading entertainment companies. It also expanded into fields such as semiconductors and batteries, along with areas such as cameras and computer monitors. Many of them became popular in their own right, but none hit the big time quite like the PlayStation video gaming system—a phenomena that revolutionized the industry upon its introduction in 1994, and quickly became the dominant item in Sony’s entire product line.
Serious competition began arriving almost immediately, however, and like most of its peers the king of consumer electronics is now seeking ways to hold its lead while positioning itself for the Internet Age.

Originally incorporated after World War II as Tokyo Tsushin Kogyo—or the Tokyo Telecommunications Engineering Corporation—Sony’s seeds were sewn when co-founder Morita Akio was born in 1921. Raised in a family in Nagoya, Japan, that had brewed sake for generations, Akio spurned the career path that was expected of him and decided to follow his intense passion for technology. After graduating from Osaka Imperial University in 1944 with a degree in physics, he was assigned to the Air Armory at Yokosuka for the duration of the war. It was there that he first encountered Sony’s other co-founder, Ibuka Masaru, who was serving as an industrial representative on Japan’s Wartime Research Committee. Together, they developed thermal guidance systems and devices for night-vision.
After the war, the pair established their company in Tokyo. The goal was to apply various technological innovations that had been developed during the preceding years to the production of new electronic gear for a general audience. Masaru concentrated on the products, which initially consisted of things like voltmeters and electrically heated cushions. Akio handled business matters, which from the start included responsibility for marketing the new firm’s devices around the world.
Masar u’s first breakthrough product was magnetic recording tape, which he developed in 1949. The company then built an audiotape recorder to utilize it, and introduced this to the Japanese market in 1950. The same year Masaru’s tape became available, the young firm also purchased rights from America’s Bell Labs to produce electronic transistors. The success of its tape recorders generated resources that permitted creation of a compact radio in 1955 and a pocket-sized version in 1957.
Tokyo Tsushin Kogyo was up and running, but the global businessman in Akio saw serious limitations in its name. After searching dictionaries in different languages for a new corporate moniker that could be pronounced by almost anyone, he came upon “sonus,” the Latin word for “sound.” And so, in 1958, Sony was born.
From there, the sky was the limit. In 1960 Sony introduced an 8-inch transistorized TV and set its sights on conquering America. Akio pushed Sony to become the first Japanese company to offer shares on the New York Stock Exchange in 1961. Two years later, Akio moved his family to the States for a year so that he could more effectively examine the ways its consumers were thinking and its businessmen were operating. He opened factories in the United States and Europe, and used Americanstyle ad campaigns to inject the Sony brand name on the collective shoppers’ consciousness worldwide. When Trinitron sets caught on several years later, every Japanese company (including Toshiba and Hitachi) that was selling electronics in the United States benefitted from the increased awareness. Their combined share of the overall American market rose from 7 percent in 1963 to 40 percent in 1974. (By 1974, Sony was supplying one of every five color TVs in the United States.)
Reaching back to its hugely successful introduction of magnetic recording tape some two decades earlier, Sony also began looking, in the 1960s, for ways to commercially adapt this technology to the burgeoning television market. In 1969, it introduced its first videocassette recording and playback device. Morita Akio was promoted to chief executive officer of the company in 1971, and the following year he created an affiliate to build and begin selling the “Betamax” machine around the world. The new machine hit the stores in 1975 and immediately attracted the attention of hardcore gadget aficionados, just as Sony’s Trinitrons did a few years before.
In the spirit of its founders, however, current Chairman and CEO Nobuyuki Idei continues delving into new arenas. These include a personal digital assistant that will sell for under $100 and can interact with other Sony products. The company is also developing smart cell phones and handheld computers. They are also working on ways to connect everything they make—from the Walkman to PlayStation—to the Web. Morita Akio, who died in 1999, would undoubtably be intrigued.