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Tag: 盛田昭夫

  • SONY 70th Birthday: Happy Birthday SONY!

    SONY 70th Birthday: Happy Birthday SONY!

    Today: by far the strongest profits are not from electronics or Playstation, but from the subsidiary SONY Financial Holdings Inc within Japan

    SONY 70th Birthday: Tokyo Tsushin Kogyo (Totsuko) was founded on May 7, 1946

    SONY celebrates 70th Birthday today – SONY’s predecessor Tokyo Tsushin Kogyo (東京通信工業株式会社), Totsuko (東通工) was founded on May 7, 1946 by:

    following preparations going back to 1945.

    Outside Japan there is a tendency to focus on one of the two co-founders, Akio Morita, however, as an engineer Masaru Ibuka was as least as important a co-founder.

    Masaru Ibuka (井深大), co-founder

    Masaru Ibuka (井深大) was a passionate engineer, and drove much of the technical product development, recruiting and leading some of the best engineers.

    Read Masaru Ibuka’s obituary in NATURE here: “Obituary: Masaru Ibuka (1908-97). Electrical engineer and co-founder of SONY” by Gerhard Fasol.

    Read also: Masaru Ibuka, Founder of SONY, Obituary for NATURE

    SONY over the most recent 18 years (1998-2016)

    compound annual growth rate (CAGR) = 1.0% over the last 18 years

    Essentially, over the last 18 years (FY ending March 31, 1998 – FY ending March 31, 2016), SONY’s revenues=sales have been stable, growing on average 1% per year.

    SONY's revenues/sales grow at an average compound annual growth rate (CAGR) of 1.0% over the 18 years from FY1998-FY2016
    SONY’s revenues/sales grow at an average compound annual growth rate (CAGR) of 1.0% over the 18 years from FY1998-FY2016

    net income/profit margin = 0.4% over the last 18 years

    Net income/profits have been 0.4% (approximately zero) averaged over these 18 years – as is characteristic for Japan’s top 8 electronics multinationals.

    Back in the days of Trinitron vacuum tube TVs and mechanical Walkman tape recorders, SONY’s products could command relatively high profit margins, the falling edge can be seen in the Figure below: gross profit margins were as high as 8% back in 1998, and net profit margins as high as 3% of sales. However, averaged over the last 18 years, net profit margins average about 0.4%.

    SONY's average net income/profit margin over the last 18 years has been very close to zero.
    SONY’s average net income/profit margin over the last 18 years has been very close to zero.

    SONY’s subsidiary “SONY Financial Holdings Inc” (60% owned by SONY) is by far the most profitable division of SONY

    SONY publishes detailed reports of operating profits for its different divisions, showing that by far the most profitable division are Financial Services, which are not an integral part of the SONY Corporation (ソニー株式会社), but a partly (60%) owned and separately managed subsidiary SONY Financial Holdings Inc (ソニーフィナンシャルホールディングス株式会社).

    In the latest financial report for the Financial Year ending March 31, 2016, SONY Finance has twice as much income/profit as the next most profitable divisions – SONY’s Financial Services (mainly offering credit card and banking services inside Japan) are and have been by far the most profitable division of SONY for many years.

    SONY Financial Holdings Inc (ソニーフィナンシャルホールディングス株式会社) is a subsidiary of SONY, and is independently listed on the Tokyo Stock Exchange [TSE Code 8729], was founded on April 1, 2004, and IPO was on Oct 11, 2007. SONY owns 60% of SONY Financial Holdings Inc’s shares.

    Our report: “Japan electronics industries – mono zukuri”

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  • Masaru Ibuka, Founder of SONY, Obituary for NATURE

    Masaru Ibuka, Founder of SONY, Obituary for NATURE

    Masaru Ibuka obituary in NATURE by Gerhard Fasol

    After Masaru Ibuka (井深大) died on December 19, 1997, NATURE asked me to write an obituary about Masaru Ibuka, which was published in Nature on February 26, 1998, and you can download the article as a pdf-file here. The reference is: Gerhard Fasol, “Obituary: Masaru Ibuka (1908-97)”, Nature 391, p. 848 (26 February 1998).

    Masaru Ibuka obituary in NATURE by Gerhard Fasol – the background

    I used several weeks of my spare time to research and write this obituary. For example, I worked to reach and talk with several people who had met Ibuka in person, since I had never personally met Ibuka. As another example: General McArthur’s Government of Japan wanted to communicate with the population of Japan via radio, however, radio receiver production in Japan was very inefficient at that time due to quality problems, leading to very low yield. So General McArthur’s Government brought Quality experts Homer Sarasohn and Charles Protzmann to Japan to teach classes in quality management. I found out that Ibuka was a keen student of these quality classes. To understand this better, I phoned with a retired officer of General McArthur’s Government, and I also found relatives of Homer Sarasohn, who very kindly gave me a lot of information about Homer Sarasohn’s work in teaching quality management in Japan.

    Debunking some myths about SONY and Masaru Ibuka

    Interestingly, there is a lot of misunderstandings and myths around SONY, some of which I clarified in the Nature obituary for Masaru Ibuka.

    Myth: Akio Morita is the founder of SONY

    Reality: SONY was founded as Tokyo Tsushin Kenkyusho (the Tokyo Communications Laboratory) by Masaru Ibuka and by Akio Morita, who are the two co-founders of Tokyo Tsushin Kenkyusho, the company name was later changed to SONY.

    Myth in Japan: Many people in Japan think that SONY is an American company

    Reality: SONY is a Japanese company with headquarters in Tokyo-Shinagawa. The reason why many people think that SONY is an American company, is that SONY’s company name and brand name in Japan is written in Katakana, while traditional Japanese companies always write their company in Chinese characters (Kanji). (Note however, that Nissan President Carlos Ghosn, says that companies have no nationality).

    Myth: Nobel Prize winner Leo Esaki discovered the tunnel diode, for which he was awarded the Nobel Prize, at IBM

    Reality: Leo Esaki discovered the tunnel diode as a researcher at Tokyo Tsushin Kenkyusho, which later changed the company name to SONY. Leo Esaki then moved to IBM Yorktown Heights R&D labs, and was awarded the Nobel Prize while working at IBM for his discovery of the tunnel diode, which he discovered while working at Tokyo Tsushin Kenkyusho.

    Read more about today’s SONY:

    Japan electronics industries: mono zukuri

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