Design

The rise and fall of Sony

12 December 2015

9:00 AM

12 December 2015

9:00 AM

Here is a Japanese fairy tale for Christmas. An allegory of insight, opportunism and a fall from favour. It is 1945. Japan is devastated and disgraced, but two bright young men, Akio Morita and Masaru Ibuka, the first a salesman, the second an engineer, have a plan to turn toxic ashes into precious metal.

They have discovered a curious typewritten document published by the Civil Information and Education division of the US Occupation Forces. It is called ‘999 Uses for a Tape-Recorder’. In those days, people needed to be told these things. Inspired, they form a company called TTK and Ibuka writes in its Purposes of Incorporation that it will make ‘imaginative use of technology …to help restore national culture’.

By 1950, Morita and Ibuka have designed and manufactured their own G-Type tape-recorder. As plastic is unavailable, its recording medium is magnetised paper, which they call Soni-Tape. This paper is so fragile that the tape-transport mechanism must be made to very high tolerances, a technical advantage that TTK will in future exploit.

In 1953, wearing a dashing white suit, Morita travels to the United States. Here he discovers that the sleepy cheese-smelling gaijin have patented something called a transistor, but have decided it has no commercial applications. Wisely, Morita-san sees things rather differently.

Back in Tokyo, Morita briefs his technicians to create a transistor radio. Light, efficient, tiny, inexpensive and portable, the TR-55 appears in 1955. At this point, one of the friendly Japanese gods, perhaps the jovial Hotei, guardian of barmen — Morita comes from a sake-brewing family — intervenes decisively and inspires Morita to his best ever decision.


Guessing that Anglophone export markets will struggle to say Tokyo Tsushin Kogyo Kabushiki Kaisha (or TTK, Tokyo Telecommunications Company), Morita decides to rename his company Sony. This is a splendid coinage in Japlish that evokes both sonus, the Latin word for sound, and ‘sonny’, the affectionate name for a male child. No one bothers much about the spelling or the pronunciation.

When a vast consignment of TR-55 radios is sensationally stolen from a New York warehouse, the publicity establishes Sony’s reputation for desirability and many suspect that Morita, who will soon become known as ‘Mr Transistor’, was not entirely dismayed by the theft since he plays it so well to his company’s reputational advantage.

Sony now begins a 25-year period of astonishing creativity, unrivalled in the history of consumerism, making products that are not merely useful or convenient, but actually change human behaviour. And often these same products have an exquisite lapidary quality that, at some level, reminds customers of the great Japanese traditional art forms where fine materials, superb detail and miniaturisation are prized. Netsuke, for example.

A radical innovation occurs almost every year. There was a portable transistor television with an eight-inch screen in 1959 and an even cuter one with a five-inch screen three years later. In 1965 Sony sold its first (black-and-white) video-recorder. In 1966 integrated circuits replaced transistors and dimensions shrank again. In 1968 Sony’s Trinitron established new technical and aesthetic standards in television design. It was art, of a sort. There was colour video in 1971 and the Betamax video-cassette in 1975.

In 1979, Sony introduced the Walkman. This was lateral thinking of a very high order: a tape-recorder that did not record and had no loudspeaker, but played back through professional-quality headphones. People gasped at the quality of sound and then gasped again when they realised that the Walkman also created liberating personal space, anaesthetising users from the urban scrum (there’s more on the Walkman from Rory Sutherland, p127). Sony was the Apple and more of its day. And it became the first Japanese company to be honoured by a monographic exhibition in London’s V&A. I know. I organised it.

Soon there were CDs and in 1982 Akio Morita travelled to London to demonstrate the new Mavica to his old friend Edward Heath. They had met, I believe, through music. As big, ugly and heavy as a car battery, this Magnetic Video Camera was the digital-photo pioneer. I watched in my office as a proud Morita showed fuzzy primitive selfies to a giggling ex-prime minister.

But then angry gods intervened and with a suddenness as inexplicable as the extinction of the dinosaurs, Sony’s cycle of successful innovation stalled. New products were duds. Competitors caught up. The Betamax format was technically superb, but customers preferred the cheaper VHS rival. Humiliatingly, Sony began manufacturing VHS video-recorders in 1988. Their laptops and phones never did well and, aced by the despised Koreans, Sony was ruinously slow to meet consumer demand for huge flat-screen televisions.

In 1981 the writer Pete Hamill said, ‘Today New Yorkers live with an entire new set of proper nouns as common to our eyes as RCA and General Motors used to be. Sony, Pentel, Panasonic, Honda, Datsun, Sanyo, Mitsui, Yamaha, Subaru, Mitsubishi.’ Not all of these proper nouns are still flourishing and Sony’s fairy-tale decline prompts thoughts about the fragility of success. Two years ago, investors even shamingly suggested that Sony should abandon manufacturing and concentrate, instead, on its lucrative, but charmless, financial services.

Its reputation as a great design-led manufacturer came to an end with the recent announcement that, in March 2016, Sony will cease production of its famous Betamax cassettes and the best mechanism for recording history will itself become a thing of the past.

Sony will survive. Its games consoles and the image sensors it supplies to other manufacturers’ smartphones make money. But the pride and the beauty have gone. Thus, Sony’s fate has tracked that of Japan itself. At its peak, Morita was bumptious and arrogant and, explaining his refusal to discount, said, ‘We are selling diamonds.’ And then the diamonds returned to dust. And contrition.

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Show comments
  • Anukul

    As an optimist sony fan, I think it’s not all over yet for sony. I know at least one more sector where sony is ahead of the game, their pro consumer and professional cameras, rx100m4, alpha a6000 and alpha a7rii are gold standards today and more than that, these cameras are selling really well.

    • Shamoy Rahman

      Sony can rise again. They just need the proper management. If Sony’s market is premium top of the line devices, they must research and manufacture futuristic technologies like OLEDs, holographic displays, new emerging non-volatile memory technologies, and other areas of semiconductors that will be extremely crucial to future growth. Sony’s smartphones can succeed if they beef up the specs in their smartphones, integrate new and futuristic technologies before everyone else and try to move towards pricing things a bit lower.

      • Rex

        Sony’s smartphones can succeed if they beef up the specs in their smartphones

        Say what? Check out the Xperia range of smartphones – beautiful to look at and awesome battery life mated to top notch specs. The latest Xperia Z5 Premium is the first phone to sport a 4K resolution display.
        It’s their marketing and perception that sucks.

        • Shamoy Rahman

          Yes Sony has finally brought us something this unique but marketing is now the most crucial thing. Sony has upped its game in marketing but it doesn’t have the marketing money to compete against apple and samsung who spend billions.

    • post_x_it

      They also make the best Android phones, hands down.

      • Shamoy Rahman

        I have to agree, yes.

  • socrateos

    If you know what’s happening today, the title and content should be RISE and FALL and RISE-AGAIN story.

    • CortexUK

      55% of the eighth gen console market means they have the money coming in that they need in order to restructure elsewhere, though I’m disappointed they sold Vaio and are considering dropping/selling Bravia.

      • Shamoy Rahman

        They are not dropping or selling bravia. They spun off that division, and OLED manufacturing will come to Japan around 2018. JDI is doing its best to counter Korean competition in OLED manufacturing by bringing new technologies such as CBRITE and extended T95 lifespan to OLEDs while bringing WRGB subpixels.

        • Anukul

          JDI would probably supply oled screens for iphone, starting 2018

          • Shamoy Rahman

            Yes they are most likely going to. I hope Apple doesn’t get any supply from Samsung for OLEDs to bring more fair competition to the market.

  • L’esprit de L’escalier

    Here he discovers that the sleepy cheese-smelling gaijin have patented something called a transistor, but have decided it has no commercial applications.

    Sorry, untrue. Perhaps design specialists like the author should leave technical subjects to those who have some actual knowledge.

  • Ivan Ewan

    Got news for you. Kaz Hirai remodelled Sony into something a lot more focussed. They turned a profit in Q1 2015 and I presume it’s been stable since then. A couple of years ago they were burning money faster than we could imagine.

  • rosebery

    Everything has a lifecycle. Sony’s has, largely, been and gone, although it still makes a lot of money from selling its cloud services in the same market as Oracle, Amazon etc. I still have two Sony Walkmans, one from the 80s that I bought in Austria and one from the 90s that I bought in Bahrain. I note where I bought them because the airport duty free discounts were worthwhile in those places in those days and I thought I was getting a bargain both times. Both function perfectly well and represent the peak of that particular device. On the other hand, yesterday, I picked up a current model [CFD-S50] boombox in a charity shop for £5, presumably because it was minus a battery compartment cover. It did however have a functioning cassette player/recorder, for which I’ve been looking for a while. The point about that is that the ‘Sony’ name means nothing anymore unless you’re over 60, as I am: several other inferior brand-name boomboxes and micro audio systems were on sale for far more. By the way, it was Sony’s Apple-style walled garden approach to its format that ensured VHS won the consumer market. The Beta format is still used widely in broadcasting, so it wasn’t really a failure.

    • da3mon

      Sony cellphones still have solid quality though (and if battery life is a concern, they literally are the best), but the sad part is, most people don’t even know that Sony even makes smartphones.

      • post_x_it

        Fully agree. I’m on my second Xperia after going through several HTC and Samsung models, and even though they all run on Android, the Sonys are miles better in terms of build quality and battery life. Also have a nice look and feel and are very good value for money (particularly when compared to an iPhone).

        • MC

          My 10 year now has an M4. She loves it.

  • Mr J

    Sony still make excellent cameras, but the practical reality is that my homes were full of Sony stuff as recently as the mid-2000s. My video camera replacement cycle was automatic – the latest Sony. And then Apple introduced the iPhone and iMovie, which changed everything.

    • Shamoy Rahman

      Sony Vegas is better than iMovie lol

      • Mr J

        New to me, but thanx for the heads-up. Quite pricey (iM is free) but I might give it a go.

        • Shamoy Rahman

          Give it a try, you’ll really love it. It has support for the widest variety of plugins and has the most powerful rendering algorithms in any video editing software available.

  • Arnold Vere Ward

    Play Stations are still up there with the best gaming consoles, which counts for the under 25s

  • Torybushhug

    Plebs like me knew a decade ago where Sony was flunking as we wrestled with it’s impenetrable media software, and something as simple as uploading a video to your PC required one to set aside an entire day, with an impending sense of dread.

    As with many once great companies, the problem is those at the top of the hierarchy lack a proper customer insight. They could do away with 90% of the work they do and instead replace it with spending time with real customers (not ones bought into a ‘perfectly’ set-up consumer testing where the engineers have arranged everything to work).

    • post_x_it

      Steve Jobs didn’t spend time with customers. He knew what they wanted, long before they realised it themselves.

      • Hamburger

        I think that he watched a lot of Star Trek in his youth.

  • ian channing

    Japanese consumer electronics conquered the world for two main reasons: their peerless, tirelessly innovative quality–the wellknown good reason–and their total control of the huge home market, which is the now forgotten bad reason. All of the Japanese electronics giants–Matsushita, Toshiba, Sony, Sharp, Mitsubishi, etc–benefited from operating in a captive home market in which all foreign competition was locked out, by tacit or overt consensus of every party in the supply chain. When I say all, I mean well over 99%. You could walk among literally tens of thousands of products packed into a Yodobashi Camera electronics megastore in Tokyo in the 1990s and see only one foreign brand, in a back corner for the geeks–Apple. (Microsoft were also there, as NEC’s attempt to create a Japanese OS failed, but not so visible). Philips shavers also had a niche, but apart from that there was nothing. This captive market was the essential bedrock and platform from which the export machine could take off–the big names never had to worry about the home market. This situation persisted until well into the 2000s, when the threat from Samsung and LG could no longer be sneered at or ignored. Even in the mid-2000s, you would find Samsung stuff filling electronics stores all over the world, except in one country. The Japanese just could not bring themselves to admit that the Koreans had beaten them at their own game, and Samsung phones had to be ‘smuggled’ into the Japan market as units sold under the Softbank brand and through other indirect means. (Korean cars by contrast still have not found a way in.) The complacency and xenophobia that characterised Japan’s consumer goods market have now taken their toll. Some once great names such as Sharp have fallen by the wayside, and Japan has largely missed out on the great consumer electronics product of the age, the mobile phone.

  • Bonkim

    Regrettably everything in nature has a life cycle. Sony had a good wicket though. Names that pull people to the stores are constantly changing.

  • Shamoy Rahman

    This article is officially outdated now. Sony made a $1.1 Billion profit this year and is targeting a $4 billion profit by the end of 2017. Sony’s smartphones are now the most profitable Android phones on earth ($26/phone). Sony’s JDI display’s research department has figured out how to make OLEDs last 16x longer than Samsung’s and LG’s OLEDs and use less power. At first I never approved of you, but now all I can say is thank you Kazuo Hirai. 🙂

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