Japan: Small Wonder

The American market looks so promising to Tokyo’s Sony Corp., which makes small but thinks big, that it has sent its co-founder to Manhattan to stay two years. The U.S. already absorbs half of the company’s exports, and last year brought in 20% of its sales of $63 million, but Co-Founder Akio Morita, 42, intends to raise Sony’s volume.

Sony, the world’s best-known maker of transistor radios, ships 700,000 tiny sets a year to more than 70 countries, and has helped to turn a generation of teenagers into strolling jukeboxes.

Addicted to quality, Sony has done as much as any company to demolish the cheap and imitative image of Japanese goods, and is being widely imitated it self. An Italian manufacturer for a while sold .a Sony-looking transistor radio called “Somy.” Back home, electrical companies from Mitsubishi to Matsu shita this year rushed out portable TV sets to compete with Sony’s battery-powered, transistorized models, which come with 5-in. or 8-in. screens and weigh only 8 Ibs. General Electric also started thinking small, last month introduced an 11 -in. plug-in TV set listed at $99.95 — about half of what the portable Sony set discounts for in the U.S.

East Meets West. Though heightened competition challenges Sony’s current U.S. sales rate of 15,000 midget TV sets per month, President Masaru Ibuka, 55, an engineer, plans to double production by late autumn and points out that he has overcome hurdles before. After spending the war trying to concoct a heat-ray gun for the Japanese armed forces, Ibuka, along with Morita, assembled $530 and eight displaced technicians in a bomb-gutted department store. They started making radio gear.

Many other Japanese tried and failed at the same thing, but Sony succeeded by blending Eastern industriousness with modern Western business technique. The company favors hard-sell advertising, channels about 4.5% of sales into research, and is quick to add its own twist to what others invent. Brags Ibuka: “We have always been the first to see the possibilities in any new discovery and translate it into practical, useful items.” After U.S. scientists at Bell Telephone Laboratories developed the transistor, Sony became the first non-U.S. company to make transistor radios. Older and bigger Japanese companies soon began competing with the upstart, but Sony held its own by successfully invading the U.S. market despite a 12.5% tariff.

It now turns out 50 models of radios and a broad line of highly original tape recorders, microphones, semiconductors.

Instant Action. Helped by new products, Ibuka expects Sony’s sales to rise 25% this year. Sony is working on a miniature color TV set and a light weight, transistorized videotape recorder that turns out instant movies. This week Sony will deliver its first recorders to U.S. customers. The cost is still high ($10,900), but Sony expects to sell a thousand by next June — mostly in the U.S. — to schools, research labs, and even race tracks.