Akio Morita Gadget Guru

Akio Morita
Co-founder of Sony Corporation of America
Founded: 1946

"Our plan is to lead the public with new products rather than ask them what kind of products they want. The public does not know what is possible, but we do."-Akio Morita

In 1946, in the basement of a former department store, Akio Morita and Masaru Ibuka set out to make Japan's first tape recorders. World War II had just ended, and even basic materials were scarce. For the tape, Morita scrounged some mimeograph paper, which they cut into narrow strips with razor blades. For the magnetic coating, they melted oxalicferrite powder in a skillet to create ferric oxide, then painted it onto the paper strips. The tape sounded terrible, but it worked. And from these humble beginnings, Sony was born.

Over the next 50 years, Sony would go on to become the No. 1 consumer brand name in the world. The man responsible for that amazing feat is Sony co-founder Akio Morita-a brilliant marketer who turned the fledgling company into an international presence.

Morita was born into a wealthy family of sake brewers in 1921. As the oldest of three sons, he was expected to take over the family business. But Morita's interests lay elsewhere. "When I was in high school," Morita would later recall, "my father bought me an electronic phonograph. The sound was fantastic. I was so impressed, I started to wonder how and why such sound came out. That's when my interest in electronics began." Morita studied electronics in his spare time and attempted to build his own radio, phonograph and tape recorder, succeeding in all but the last.

After convincing his father to let his younger brother run the family brewery, Morita enrolled in Osaka Imperial University, where he earned a bachelor's degree in physics. During World War II, he was drafted into the Imperial Japanese Navy, but instead of combat duty, he was assigned to a Naval Research Center at Susaki. It was there that he met the man who would become his business partner, Masaru Ibuka.

After the war, with the equivalent of $500 in capital, Morita and Ibuka formed the Tokyo Telecommunications Co., which was later renamed Sony. The company's early products included vacuum tube voltmeters, amplifiers and a bulky $500 tape recorder that proved to be too expensive for the consumer market. Sony's first real breakthrough came when it produced the first transistor radio in 1955. Bell Laboratories had developed transistors in the United States, but Sony was the first to use them in radios (and later, in other electronic devices as well) for mass production to the public.

From the outset, Morita saw America as the most likely market for Sony's products-business was booming, employment was high and people were eager for new and exciting things. With Sony's first transistor radio in hand, Morita made the rounds to American distributors, but found little enthusiasm. Finally, a purchasing agent at the Bulova watch company saw the miniature radios and said he would take 100,000 of them, provided he could market them under the Bulova name.

This was a huge order, worth more than Sony's total capitalization at the time. But Morita was set on building Sony into an international brand. Despite a cablegram from Ibuka and Sony's board instructing him to accept the offer, he turned Bulova down. Later, he would describe this as the best business decision of his career.

Morita eventually found a distributor who agreed to sell the radios under the Sony name, and as he had predicted, Americans loved the newfangled invention. The radio's success led to other firsts in transistorized products, including an 8-inch transistorized television and a videotape recorder. Sony's technological achievements in product design, production and marketing helped transform the "Made in Japan" label from being a synonym for cheap imitations to a symbol of superior quality. In Morita's own words, they made Sony the Cadillac of electronics.

Determined to build a presence in the United States that would dominate the landscape without appearing foreign, Morita moved himself and his family to New York in 1963 to personally oversee the operations of Sony Corp. of America, which had been established three years earlier. Morita reasoned that to sell to Americans effectively, he would have to know more about them and how they lived. He quickly built a solid and valuable network of contacts by socializing and giving parties during the week-a habit he maintained throughout his career.

A master at finding a need and filling it, Morita observed that Americans loved music and would listen to it in their cars and even carry large stereos to the beach and the park. He came up with an idea for a product that offered high-quality sound yet was portable enough to allow the user to listen while doing something else. Thus, one of Sony's most popular and profitable products was born: the Walkman.

The Walkman was a big windfall for Sony because its technology proved to be difficult to duplicate. It was more than two years before other companies could introduce competing models. By that time, Sony had sold 20 million units, and the company's reputation and brand recognition soared worldwide.

With Morita as CEO, Sony continued to diversify and became a leader in virtually every aspect of the consumer electronics market, from televisions to CD players. In 1987, the company purchased CBS Records for $2 billion, then before his retirement as CEO in 1989, Morita set into motion the deal that would lead Sony to purchase Columbia Pictures, making Sony a major player in the entertainment industry.

In 1993, Morita suffered a stroke that left him partially paralyzed. He retained his title as chairman until 1995, but continued to wield enormous power over the company he helped found until October 1999, when he died from pneumonia at age 78.

Akio Morita pioneered the marketing concept of brand-name recognition at a time when most companies in Japan were producing products under somebody else's name. With this strategy, as well as his unswerving dedication to provide the best available technology, he helped make the Sony name synonymous with superior-quality consumer electronics.

Leader Of The Pack
One of the secrets of Sony's success was Akio Morita's dedication to "staying two steps ahead of the competition" in the development of new products. As a result, Sony boasts many industry firsts, including:

• The first AM transistor radio
• The first pocket-sized transistor radio
• The first two-band transistor radio
• The first FM transistor radio
• The first all-transistor television set
• The first home-use VCR
• The first 8 mm video camera

The Betamax Blunder
In a 1986 interview, Akio Morita was asked to name his worst business error. After hemming and hawing a bit, he finally replied, "Beta." Sony pioneered the videocassette recorder with the beta format and stubbornly stood by it even when the VHS format began to corner the market. As a result, Sony's highly profitable VCR sales of the 1970s and early 1980s soon dwindled and eventually became a liability.