Sony Corporation

SONY CORPORATION

Since its post-World War II (1939–1945) founding in Japan, the Sony Corporation revolutionized the consumer electronics field. The Sony name became familiar throughout the world for such innovative products as the transistor radio, the Trinitron television, the Walkman cassette player, and the compact disk (CD). The company also joined in other diversified industries such as entertainment, battery manufacture, life insurance, and sports equipment. By the end of the twentieth century it cooperated with the People's Republic of China to produce television sets. Sony had become a major player on the international market.

After the devastation of World War II Japan was ripe for all kinds of business developments which would bring the country back to normal life, but at the same time, revolutionize its business practices and institutions. In 1946, with borrowed capital, Akio Morita and Masuri Ibuka set up the company known as Tokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Corporation), the forerunner of Sony. They first developed a rice cooker, which was a failure, but they soon succeeded with a tape recorder. When Norio Ohga, a student of opera, wrote to complain about the tape recorder's sound quality, Morita and Ibuka invited him to present his critiques in person and later asked him to join the company, and he eventually became president and chairman.

In 1952 the two directors first heard of a tiny new capacitor called a transistor, which had been developed by Bell Laboratories and used by Western Electric to manufacture hearing aids. Ibuka obtained a patent license to begin producing the first transistor radios in 1954. They named the radio "Sony," after the Latin word for "sound" and the word "sonny," or little son. Prior to the Sony transistor radio portable radios were fairly large because of their vacuum tubes. Consumers were amazed at the compactness of Sony radios and were eager to buy them.

To market his product in the United States, Morita himself traveled to New York to meet with representatives of several large retail businesses. In 1958 Morita and Ibuka decided to change the whole name of the company to Sony Kabushiki Kaisha (Corporation). Within a year the company had developed a transistorized television.

Sony began to expand rapidly, establishing trade offices in Switzerland, the U.S., and England. A subsidiary was also set up to provide the adhesives and plastics needed for manufacturing. Other transistorized products were also developed such as the AM/FM radio and a videotape recorder. Sony's biggest gamble during the 1960s was the Trinitron television, which, at the time, used the most advanced color technology. Norio Ohga also headed a new venture called CBS/Sony, which became the largest manufacturer of phonograph records in Japan.

In the 1970s Sony was the pioneer in the development of Betamax video-cassette recorders (VCRs), yet by the end of the decade the Beta format had been superseded by the video home system (VHS) format introduced by Sony's competitors. A market war ensued between Sony and manufacturers of VHS systems—Sony refused to market a VHS line until the late 1980s and began to lose market share.

A more successful venture at Sony was the introduction of the Walkman compact cassette player in 1979. By using a small player and lightweight headphones a person was able to enjoy music while walking. The term "Walkman" soon became the generic name for similar products produced by Sony's competitors.

Norio Ohga became president of Sony in 1982 after Ibuka and Morita had begun to cut down on their duties. Ohga reached out to institutional markets as well as to individual consumers; he also focused attention on research and development. In partnership with the Dutch firm Phillips, Sony developed the first laser disk recorder, or compact disk (CD), which greatly improved sound quality. By the 1990s the CD format used by Sony and several competitors had virtually eliminated old phonograph systems.

From its bitter experience with the Beta-VHS conflict Sony officials had learned that a superior product alone would not guarantee sales. When the company developed a lightweight video camera in 1985 it did so in conjunction with over 100 competitors to ensure that future cameras would be compatible with its 8mm format. Sony also bought a company which manufactured the new digital audio tape (DAT), with hopes to ensure future compatibility among recording systems. Sony also sought to increase its institutional sales and to continue to diversify. It purchased Apple Computer's hard-disk technology operations, the Digital Audio Disk Corporation, CBS Records, and Columbia Pictures Entertainment. In 1990 Sony posted a 38.5 increase in earnings over 1989.

Like many other companies in the global economy Sony experienced a downturn in the 1990s. Appreciation in the value of the Japanese yen adversely affected the company's export sales in the mid-1990s. In 1995 Morita relinquished his chairmanship in favor of Ohga, and Nobuyuki Idei was named president. Despite setbacks the Morita era had led to Sony's great success. Sony occupied a pre-eminent place in a worldwide, consumer electronics industry—the company had 173,000 employees and annual sales of $51.2 billion in 1998. Morita had been the most visible spokesman for the company, as well as an effective purveyor of ideas. He created the Sony name and several of the product names—Walkman, Handycam, and Watchman. Under his leadership Sony engineers developed an astounding array of revolutionary electronic products which are now accepted as everyday necessities.

In 1998 Sony Electronics Inc. (SEL), the largest component of Sony America, became an independent company. Its president, Teruaki Aoki (responsible for Sony's entry into the digital video disk (DVD) market), told Electronic Engineering Times that SEL would be "an autonomous company now serving as a good partner for Sony Corporation." In the late 1990s Sony also began marketing an interactive video game console called PlayStation (and later PlayStation II), whose major competitor was the Sega Dreamcast system. In creating these practical luxuries the Sony Corporation has made their products essential to daily life as well as erasing the negative image once attached to products wearing the label "Made in Japan."

See also: Akio Morita

FURTHER READING

Fox, Barry. "A God of Japanese Electronics: Sony Corp. Founder and Chairman Akio Morita." New Scientist, July 11, 1992.

Kirkup, James. "Obituary: Masaru Ibuka." Independent, December 22, 1997.

Lyons, Nick. The Sony Vision. New York: Crown, 1976.

Morita, Akio. Made in Japan: Akio Morita and Sony. New York: Dutton, 1986.

Yoshida, Junko. "Sony Electronics Charts Independent Course." Electronic Engineering Times, August 3, 1998.