Sony

Sony

is a multinational conglomerate corporation headquartered in Minato, Tokyo, Japan, and one of the world's largest media conglomerates with revenue exceeding US$88.7 billion (as of 2008). Sony is one of the leading manufacturers of electronics, video, communications, video game consoles and information technology products for the consumer and professional markets. Its name is derived from Sonus, the Greek goddess of sound.

Sony Corporation is the electronics business unit and the parent company of the Sony Group, which is engaged in business through its five operating segments—electronics, games, entertainment (motion pictures and music), financial services and other. These make Sony one of the most comprehensive entertainment companies in the world. Sony's principal business operations include Sony Corporation (Sony Electronics in the U.S.), Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment, Sony Ericsson and Sony Financial Holdings. As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders. The company's slogan is Sony. Like no other.

History

In 1945, after World War II, Masaru Ibuka started a radio repair shop in a bombed-out building in Tokyo. The next year, he was joined by his colleague Akio Morita and they founded a company called Tokyo Tsushin Kogyo K.K., which translates in English to Tokyo Telecommunications Engineering Corporation. The company built Japan's first tape recorder called the Type-G.

In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs' invention of the transistor. He convinced Bell to license the transistor technology to his Japanese company. While most American companies were researching the transistor for its military applications, Ibuka looked to apply it to communications. Although the American companies Regency and Texas Instruments built the first transistor radios, it was Ibuka's company that made them commercially successful for the first time.

In August 1955, Tokyo Telecommunications Engineering released the Sony TR-55, Japan's first commercially produced transistor radio. They followed up in December of the same year by releasing the Sony TR-72, a product that won favor both within Japan and in export markets, including Canada, Australia, the Netherlands and Germany. Featuring six transistors, push-pull output and greatly improved sound quality, the TR-72 continued to be a popular seller into the early sixties.

In May 1956, the company released the TR-6, which featured an innovative slim design and sound quality capable of rivaling portable tube radios. It was for the TR-6 that Sony first contracted "Atchan", a cartoon character created by Fuyuhiko Okabe, to become its advertising character. Now known as "Sony Boy", the character first appeared in a cartoon ad holding a TR-6 to his ear, but went on to represent the company in ads for a variety of products well into the mid-sixties. The following year, 1957, Tokyo Telecommunications Engineering came out with the TR-63 model, then the smallest (112 × 71 × 32 mm) transistor radio in commercial production. It was a worldwide commercial success.

University of Arizona professor Michael Brian Schiffer, Ph.D., says, "Sony was not first, but its transistor radio was the most successful. The TR-63 of 1957 cracked open the U.S. market and launched the new industry of consumer microelectronics." By the mid 1950s, American teens had begun buying portable transistor radios in huge numbers, helping to propel the fledgling industry from an estimated 100,000 units in 1955 to 5,000,000 units by the end of 1968. However, this huge growth in portable transistor radio sales that saw Sony rise to be the dominant player in the consumer electronics field was not because of the consumers who had bought the earlier generation of tube radio consoles, but was driven by a distinctly new American phenomenon at the time called rock and roll.

Origin of name

When Kogyo was looking for a romanized name to use to market themselves, they strongly considered using their initials, TTK. The primary reason they did not is that the railway company Tokyo Kyuko was known as TKK.. The company occasionally used the acronym "Totsuko" in Japan, but during his visit to the United States, Morita discovered that Americans had trouble pronouncing that name. Another early name that was tried out for a while was "Tokyo Teletech" until Morita discovered that there was an American company already using Teletech as a brand name.

The name "Sony" was chosen for the brand as a mix of the Latin word Sony or son(us) and also a little boy sonny, which is the root of sonic and sound as well as familiar word of everybody called a boy in February 1955, and company name changed to Sony in January 1958. Morita pushed for a word that does not exist in any language so that they could claim the word "Sony" as their own (which paid off when they successfully sued a candy producer using the name, who claimed that "Sony" was an existing word in some language).

At the time of the change, it was extremely unusual for a Japanese company to use Roman letters instead of kanji to spell its name. The move was not without opposition: TTK's principal bank at the time, Mitsui, had strong feelings about the name. They pushed for a name such as Sony Electronic Industries, or Sony Teletech. Akio Morita was firm, however, as he did not want the company name tied to any particular industry. Eventually, both Ibuka and Mitsui Bank's chairman gave their approval.

Notable Sony products, technologies and proprietary formats

Sony has historically been notable for creating its own in-house standards for new recording and storage technologies instead of adopting those of other manufacturers and standards bodies. The most infamous of these was the videotape format war of the early 1980s, when Sony marketed the Betamax system for video cassette recorders against the VHS format developed by JVC. In the end, VHS gained critical mass in the marketplace and became the worldwide standard for consumer VCRs and Sony adopted the format. While Betamax is for all practical purposes an obsolete format, a professional-oriented component video format called Betacam that was derived from Betamax is still used today, especially in the film and television industry.

Early Sony products included reel-to-reel tape recorders and transistor radios.

In 1968 Sony introduced the Trinitron brand name for its line of aperture grille cathode ray tube televisions and (later) computer monitors. Trinitron displays are still produced, but only for markets like India and China. Sony discontinued the last Trinitron-based television set in the USA Spring of 2007. Trinitron computer monitors were discontinued in 2005.

Sony launched the Betamax videocassette recording format in 1975. In 1979 the Walkman brand was introduced, in the form of the world's first portable music player.

1982 saw the launch of Sony's professional Betacam videotape format and the collaborative Compact Disc format. In 1983 Sony introduced 90mm micro diskettes (better known as 3.5-inch floppy disks), which it had developed at a time when there were 4" floppy disks and a lot of variations from different companies to replace the then on-going 5.25" floppy disks. Sony had great success and the format became dominant; 3.5" floppy disks gradually became obsolete as they were replaced by current media formats. In 1983 Sony launched the MSX, a home computer system, and introduced the world (with their counterpart Philips) to the Compact Disc or CD. In 1984 Sony launched the Discman series which extended their Walkman brand to portable CD products. In 1985 Sony launched their Handycam products and the Video8 format. Video8 and the follow-on hi-band Hi-8 format became popular in the consumer camcorder market. In 1987 Sony launched the 4mm DAT or Digital Audio Tape as a new digital audio tape standard.

In addition to developing consumer-based recording media, after the launch of the CD Sony began development of commercially based recording media. In 1986 they launched Write-Once optical discs (WO) and in 1988 launched Magneto-optical discs which were around 125MB size for the specific use of archival data storage.

In the early 1990s two high-density optical storage standards were being developed: one was the MultiMedia Compact Disc (MMCD), backed by Philips and Sony, and the other was the Super Density disc (SD), supported by Toshiba and many others. Philips and Sony abandoned their MMCD format and agreed upon Toshiba's SD format with only one modification based on MMCD technology, viz EFMPlus. The unified disc format was called DVD which was marketed in 1997.

Sony introduced the MiniDisc format in 1993 as an alternative to Philips DCC or Digital Compact Cassette. Since the introduction of MiniDisc, Sony has attempted to promote its own audio compression technologies under the ATRAC brand, against the more widely used MP3. Until late 2004, Sony's Network Walkman line of digital portable music players did not support the MP3 de facto standard natively, although the provided software SonicStage would convert MP3 files into the ATRAC or ATRAC3 formats.

In 1993, Sony challenged the industry standard Dolby Digital 5.1 surround sound format with a newer and more advanced proprietary motion picture digital audio format called SDDS (Sony Dynamic Digital Sound). This format employed eight channels (7.1) of audio opposed to just six used in Dolby Digital 5.1 at the time. Unlike Dolby Digital, SDDS utilized a method of backup by having mirrored arrays of bits on both sides of the film which acted as a measure of reliability in case the film was partially damaged. Ultimately, SDDS has been vastly overshadowed by the preferred DTS (Digital Theatre System) and Dolby Digital standards in the motion picture industry. SDDS was solely developed for use in the theatre circuit; Sony never intended to develop a home theatre version of SDDS.

In 1998, Sony launched their Memory Stick format; flash memory cards for use in Sony lines of digital cameras and portable music players. It has seen little support outside of Sony's own products with Secure Digital (SD) cards commanding considerably greater popularity. Sony has made updates to the Memory Stick format with Memory Stick Duo and Memory Stick Micro.

Sony and Philips jointly developed the Sony-Philips digital interface format (S/PDIF) and the high-fidelity audio system SACD. The latter has since been entrenched in a format war with DVD-Audio. At present, neither has gained a major foothold with the general public. CDs are preferred by consumers because of their ubiquitous presence in consumer devices.

In 1994 Sony launched the PlayStation (later PS one). This successful console was succeeded by the PlayStation 2 in 2000, itself succeeded by the PlayStation 3 in 2006. The PlayStation brand was extended to the portable games market in 2005 by the PlayStation Portable. Sony developed the Universal Media Disc (UMD) optical disc medium for use on the PlayStation Portable. Although Sony tried to push the UMD format for movies, major studios stopped supporting the format in the Spring of 2006.

In 2004, Sony built upon the MiniDisc format by releasing Hi-MD. Hi-MD allows the playback and recording of audio on newly-introduced 1GB Hi-MD discs in addition to playback and recording on regular MiniDiscs. Recordings on the Hi-MD Walkmans can be transferred to and from the computer virtually unrestricted, unlike earlier NetMD. In addition to saving audio on the discs, Hi-MD allows the storage of computer files such as documents, videos and photos. Hi-MD introduced the ability to record CD-quality audio with a linear PCM recording feature. It was the first time since MiniDisc's introduction in 1992 that the ATRAC codec could be bypassed and lossless CD-quality audio could be recorded on the small discs.

Sony is currently touting the Blu-ray Disc optical disc format, which competed with Toshiba's HD DVD. As of quarter three of 2007, Blu-ray Disc had the backing of every major motion picture studio except Universal, Paramount and Dreamworks.. Since then, Blu-Ray has ended up as the dominant HD media format, with Toshiba announcing their defeat, and plans to stop supporting HD DVD on the 19th of February 2008. In December 2006 Sony debuted their first Blu-ray player, the Sony BDP-S1 with an MSRP of US $999.95.

On September 10, 2007 Sony unveiled Rolly, an egg-shaped digital robotic music player which has colour lights that flash as it “dances” and has flapping wings that can twist to its tunes. Movements along with the music downloaded from personal computers and Bluetooth can be set. Rolly, which went on sale in Japan on September 29, 2007, has one gigabyte of memory to store tunes. Sony also developed dog-shaped robots called Aibo and humanoids and Qrio.

In summary, Sony has over the years introduced these standards: Umatic (~1968), Betamax (1975), Betacam (81), Compact Disc (82), 3.5 inch Floppy Disk (82), Video8 (85), DAT (87), Hi8 (88), Minidisc (~90), Digital Betacam (~90), miniDV (92), Memory Stick (98), Digital8 (99), PSP Universal Media Disc (~2003), HDV (~2004), Blu-ray Disc (2006).

Management

On June 22, 2005, Nobuyuki Idei stepped down as Sony Corp. Chairman and Group CEO and was replaced by Howard Stringer, then Chairman and CEO of Sony Corporation of America, Corporate Executive Officer, Vice Chairman and COO Sony Entertainment Business Group. Sony's decision to replace Idei with the British Howard Stringer marked the first time that a foreigner has run a major Japanese electronics firm. On the same date, Kunitake Ando stepped down as President and was replaced by Ryoji Chubachi.

Mergers, acquisitions, and joint ventures

Manufacturing base

Slightly more than 50% of the electronics' segment's total annual production during the fiscal year 2005 took place in Japan, including the production of digital cameras, video cameras, flat panel televisions, personal computers, semiconductors and components such as batteries and Memory Stick.

Approximately 65% of the annual production in Japan was destined for other regions. China accounted for slightly more than 10% of total annual production, approximately 70% of which was destined for other regions.

Asia, excluding Japan and China, accounted for slightly more than 10% of total annual production with approximately 60% destined for Japan, the US and the EU.

The Americas and Europe together accounted for the remaining slightly less than 25% of total annual production, most of which was destined for local distribution and sale.

Controversies

Fictitious movie reviewer

In July 2000, a marketing executive working for Sony Corporation created a fictitious film critic, David Manning, who gave consistently good reviews for releases from Sony subsidiary Columbia Pictures, which generally received poor reviews amongst real critics.

Digital rights management

In October 2005, it was revealed by Mark Russinovich of Sysinternals that Sony BMG Music Entertainment's music CDs had installed a rootkit on the user's computer as a DRM measure (called Extended Copy Protection by its creator, British company First 4 Internet), which was difficult to detect or remove. This constitutes a crime in many countries, and poses a major security risk to affected users. The uninstaller Sony initially provided removed the rootkit, but in turn installed a dial-home program that posed an even greater security risk. Sony eventually provided an actual uninstaller that removed all of Sony's DRM program from the user's computer. Sony BMG faced several class action lawsuits regarding this matter. On 31 January 2007, the U. S. Federal Trade Commission issued a news release announcing that Sony BMG had agreed to settle Federal Trade Commission charges that Sony BMG committed several offenses against United States federal law. This settlement required that Sony BMG allow consumers to exchange the CDs through 30 June 2007, and to reimburse consumers for up to $150 for the repair of damage to their computers that they may have incurred while removing the software.

In 2006 Sony started using ARccOS Protection on some of their film DVDs, which caused compatibility problems with some DVD players—including models manufactured by Sony. After complaints, Sony was forced to issue a recall.

In August 2007, security firm F-Secure reported that the MicroVault USB thumb drive installs a rootkit in a hidden directory without consent on user computers. The directory is intended to protect fingerprint data, however it can be used for malicious means as most virus scanners will not search for the directory or its contents. Sony advised it was conducting an investigation on the third-party product, and would offer a fix by mid-September.

Advertisements

To commemorate the tenth anniversary of the PlayStation (PS) gaming console in Italy, Sony released an ad depicting a man smiling towards the camera and wearing on his head a crown of thorns with button symbols (Δ, O, X, □). At the bottom, the copy read as "Ten Years of Passion". This supposedly took advantage of the publicity from the Mel Gibson film The Passion of the Christ. The ad outraged the Vatican as well as many local Catholics, prompting comments such as "Sony went too far" and "Vatican ex-communicates Sony". After the incident, the campaign was quickly discontinued.

Sony also admitted in late 2005 to hiring graffiti artists to spray paint advertisements for their PlayStation Portable game system in seven major U.S. cities including New York City, Philadelphia, and San Francisco. The mayor of Philadelphia filed a cease and desist order. According to Sony, they paid businesses and building owners for the right to graffiti their walls. As of early January 2006, Sony had no plans to keep or withdraw them.

In July 2006, Sony released a Dutch advertising campaign featuring a white model dressed entirely in white and a black model garbed in black. The first ad featured the white model clutching the face of the black model. The words "White is coming" headlined one of the ads. The ad has been viewed as racist by critics. A Sony spokesperson responded that the ad does not have a racist message, saying that it was only trying to depict the contrast between the black PSP model and the new ceramic white PSP. Other pictures of the ad campaign include the black model overpowering the white model.

In November 2006, a marketing company employed by Sony created a website entitled "All I want for Xmas is a PSP", designed to promote the PSP through viral marketing. The site contained a blog, which was purportedly written by "Charlie", a teenager attempting to get his friend "Jeremy"'s parents to buy him a PSP, providing links to t-shirt iron-ons, Christmas cards, and a "music video" of either Charlie or Jeremy "rapping". However, visitors to the website soon discovered that the website was registered to a marketing company, exposing the site on sites such as YouTube and digg, and Sony was forced to admit the site's true origin in a post on the blog, stating that they would from then on "stick to making cool products" and that they would use the website for "the facts on the PSP". The site has since been taken down. In an interview with next-gen.biz, Sony admitted that the idea was "poorly executed".

Legal

In 2002, Sony Computer Entertainment America, marketer of the popular PlayStation game consoles, was sued by Immersion Corp. of San Jose, California which claimed that Sony's PlayStation "Dual Shock" controllers infringed on Immersion's patents. In 2004, a federal jury agreed with Immersion, awarding the company US$82 million in damages. A U.S. district court judge ruled on the matter in March, 2005 and not only agreed with the federal jury's ruling but also added another US$8.7 million in damages. This is likely the reason that the sixaxis controller for the PlayStation 3 had no rumble feature. The DualShock 3 has since been made available for the PlayStation 3, reintroducing rumble capabilities. Microsoft Corp. was also sued for its Xbox controller, however, unlike Sony, they settled out of court so they could continue using the technology for the follow-up Xbox 360. Washington Post: Pay Judgment Or Game Over, Sony Warned

A California judge ordered Sony to pay Immersion a licensing fee of 1.37 percent per quarter based on the sales of PlayStation units, Dual Shock controllers, and a selection of PlayStation 2 games that use Immersion's technology. Microsoft is currently suing Immersion due to an alleged breach of contract, apparently stating that Microsoft would be entitled to a portion of any cash settlement between Sony and Immersion.

Batteries

In April 2006, a Sony laptop battery exploded in Japan and caught fire. A Japanese couple in Tokyo are currently (as of July, 2007) suing both Sony and Apple Japan for over ¥2 million ($16,700 USD) regarding the incident. The suit argues that the man suffered burns on his finger when the battery burst into flames while being used, and his wife had to be treated for mental distress due to the incident.

On 14 August 2006, Sony and Dell admitted to major flaws in several Sony batteries that could result in the battery overheating and catching fire. As a result they recalled over 4.1 million laptop batteries in the largest computer-related recall to that point in history. The cost of this recall is being shared between Dell and Sony. Dell also confirmed that one of its laptops caught fire in Illinois. This recall also prompted Japan's Ministry of Economy, Trade and Industry to order the companies to investigate the troubles with the batteries. The ministry said they must report on their findings and draw up a plan to prevent future problems by the end of August, or face a fine under Japan's consumer safety laws.

Ten days later on 24 August 2006, Apple Computer recalled 1.8 million Sony built batteries after receiving nine reports of batteries overheating, including two customers who suffered minor burns, and additional reports of property damage.

On 19 September 2006, Toshiba announced it was recalling 340 000 Sony laptop batteries. This recall, however, is not related to the recalls by Apple and Dell, as the batteries are known to cause the laptops to sometimes run out of power. No injuries or other accidents have been reported, according to Toshiba spokesman Keisuke Omori.

On 23 September 2006, Sony announced its investigation of a Lenovo ThinkPad T43 laptop overheated and caught fire in Los Angeles International Airport on 16 September, an incident that was confirmed by Lenovo. On 28 September 2006, Lenovo and IBM made the global recall of 526 000 laptop batteries.

On 28 September 2006, Sony announced a global battery exchange program in response to growing consumer concerns.

On 2 October 2006, Hewlett-Packard (HP) determined that it was not necessary for them to join the global battery replacement program.

On 3 October 2006, the Yomiuri Shimbun (a Japanese Newspaper) reported that Sony was aware of faults in its notebook PC batteries in December 2005 but failed to fully study the problem.

On 16 October 2006, Fujitsu announced it was recalling 278,000 Sony laptop batteries. It was also reported that Fujitsu, Toshiba, and Hitachi may seek compensation from Sony over the battery recalls.

On 25 April 2007, Acer announced that 27,000 batteries from TravelMate and Aspire series notebooks sold from May 2004 to November 2006 were recalled due to 16 reports of overheating and explosions.

On 24 August 2007, it emerged that some of Sony's batteries that were not recalled, and in use on Dell laptop computers, may be at risk of catching fire and exploding; as another case of a Dell laptop with a Sony battery in it, came to light.

CCD

Initially, in October 2005, it was reported by Sony that there were problems with the charge-coupled devices (CCD) in 20 models of digital still cameras. The problems can prevent the cameras from taking clear pictures, and in some cases, possibly prevent a picture to be taken at all. In late November 2006, the recall was broadened to eight additional models of digital cameras sold between 2003 and 2005. The problem appears to manifest itself mostly when the camera is used in areas with hot weather. The eight models effected are the following: DSC-F88, DSC-M1, DSC-T1, DSC-T11, DSC-T3, DSC-T33, DSC-U40 and DSC-U50. Sony did indicate that they will repair or replace the affected camera at no charge. Since Sony is one of the largest producers of CCD chips, this recall may affect other manufacturer's and models of cameras, possibly as many as 100 models or more. Other manufacturers of digital cameras, including Canon, Minolta, Nikon, or Fuji have indicated they will replace faulty CCDs in their respective models of cameras if necessary.

Environmental record

Sony has received numerous awards and much recognition for their environmental efforts throughout the world. Their achievements in the way of energy and environmental conservation have earned them respect for their green campaign despite bad press from a low ranking on Greenpeace's greener electronics report .

Improvement efforts

Since 1976, Sony has had an Environmental Conference. Sony's policies address their effects on global warming, the environment, and resources. They are taking steps to reduce the amount of greenhouse gases that they put out as well as regulating the products they get from their suppliers in a process that they call "green procurement" . Sony has said that they have signed on to have about 75 percent of their Sony Building running on geothermal power. The "Sony Take Back Recycling Program" allows consumers to recycle the electronics products that they buy from Sony by taking them to eCycle (Recycling) drop-off points around the U.S. The company has also developed a biobattery that runs on sugars and carbohydrates that works similarly to the way living creatures work. This is the most powerful small biobattery to date .

Green TV

For sale in Japan on 30 July, 2008, Sony's green product, new flat-panel 32-inch TV 150,000 yen (US$ 1,400; € 900) Bravia KDL-32JE1 offers ecological consumers advantages of less energy consumption (70% less a year) than regular models with same image quality. Sony was able to reduce carbon dioxide emissions totaling 79 kilograms (174 pounds) a year, without sacrificing quality by developing a brighter back light and better filtering, which produces light more efficiently. The TVs will have liquid crystal displays along with high-definition digital broadcast capabilities.

Criticism

In 2000, Sony was ridiculed for a document entitled "NGO Strategy" that was leaked to the press. This document involved the company's surveillance of environmental activists in an attempt to plan how to counter their movements. This document specifically mentioned environmental groups that were trying to pass laws that held electronics-producing companies responsible for the clean up of the toxic chemicals contained in their merchandise . In early July of 2007, Sony ranked 14th on the Greenpeace chart "Guide to Greener Electronics." This chart graded major electronics companies on their environmental work. Sony fell from its earlier 11th place ranking due to Greenpeace's claims that Sony had double standards in their waste policies.

See also

References

Further reading

  • Made in Japan by Akio Morita and Sony, Harper Collins (1994)
  • Sony: The Private Life by John Nathan, Houghton Mifflin (1999)
  • Sony Radio, Sony Transistor Radio 35th Anniversary 1955-1990 — information booklet (1990)
  • The Portable Radio in American Life by University of Arizona Professor Michael Brian Schiffer, Ph.D. (The University of Arizona Press, 1991).
  • The Japan Project: Made in Japan. — a documentary about Sony's early history in the U.S. by Terry Sanders.

External links

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