Sony

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Sony Corporation ソニー株式会社
Type	Public (TYO: 6758 ; NYSE: SNE)
Founded	May 7, 1946 (adopted current name in 1958) by Masaru Ibuka and Akio Morita[1]
Headquarters	Minato-ku, Tokyo, Japan[1]
Key people	Howard Stringer: Chairman and CEO[1] Ryoji Chubachi: President and Electronics CEO[1] Katsumi Ihara: Executive Deputy President[1]
Industry	Consumer electronics, electronics, financial services & media
Products	Consumers electronics (audio visual & gaming) Professional audio/video equipment Semiconductors Computer hardware Financial services Film, television, music & game software others
Revenue	$63.980 billion USD (2006)[2]
Operating income	$1,604 million USD (2006)[2]
Net income	$1,058 million USD (2006)[2]
Employees	158,500 (March 31, 2006)[1]
Subsidiaries	Sony Electronics Sony Computer Entertainment Sony Ericsson (50%) Sony Pictures Entertainment Sony BMG (50%) Sony Marketing Sony Life Sony Assurance Sony Bank others
Slogan	like.no.other
Website	www.sony.net

Sony Corporation (ソニー株式会社, Sonī Kabushiki-gaisha^?) is a Japanese multinational corporation and one of the world's largest media conglomerates with revenue of $68.39 billion (as of 2006) based in Minato, Tokyo.^[1] Sony is one of the leading manufacturers of electronics, video, communications, video games, and information technology products for the consumer and professional markets.

Sony Corporation is an operating-holding company. It is the electronics business unit and the parent company of the Sony Group, which is engaged in business through its 5 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 BMG Music Entertainment and Sony Financial Holdings.

Sony recorded consolidated annual sales of approximately $67 billion for the fiscal year ended March 31, 2005,^[3] and it employs 158,100 people worldwide.^[4] Sony's consolidated sales in the U.S. for the fiscal year ended March 31, 2005 were $18.4 billion. As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders. Its slogan is Sony. Like.no.other.^[5]

Sony has reported^[6] a loss of 94% of its profits for the fiscal second quarter of 2006, and has lost roughly 40% of its value from 2001 to 2006.

Contents 1 History 1.1 Company name 2 Notable Sony products, technologies and proprietary formats 3 Management 3.1 Mergers and acquisitions 4 Controversies 4.1 Fictitious movie reviewer 4.2 Digital rights management 4.3 Advertisements 4.4 bleem! 4.5 Legal 4.6 Batteries 4.7 CCD 4.8 Lik-Sang and Grey Goods Importation 5 References 6 Further reading 7 See also 8 External links

History

In 1945, after World War II, Masaru Ibuka started a radio repair shop in a bombed-out building in Tokyo.^[7] The next year he was joined by his colleague Akio Morita, and they founded a company called Tokyo Tsushin Kogyo K.K.^[8], which translates in English to Tokyo Telecommunications Engineering Corporation. The company built Japan's first tape recorder called the Type-G.^[9]

In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs' invention of the transistor.^[10] 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. While the American companies Regency and Texas Instruments built transistor radios first, it was Ibuka's company that made the first commercially successful transistor radios.

In August 1955, Sony produced its first coat-pocket sized transistor radio they registered as the TR-55 model.^[11] In 1956, Sony reportedly manufactured about 40,000 of its Model TR-72 box-like portable transistor radios and exported the model to North America, the Netherlands and Germany.

That same year they made the TR-6, a coat pocket radio which was used by the company to create its "SONY boy" advertising character.^[12] The following year, 1957, Sony 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.^[13]

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 1958. However, this huge growth in portable transistor radio sales that saw Sony rise to be the dominant player in the consumer electronics field ^[14] 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.

Company 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.^[15]. The company occasionally used the acronym "Totsuko" in Japan, but Morita discovered that Americans had trouble pronouncing that name, during his visit to the United States. 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.^[16]

The name "Sony" was chosen for the brand as a mix of the Latin word sonus, which is the root of sonic and sound, the English word "sunny", and from the word Sonny-boys which is Japanese slang for "whiz kids". However "Sonny" was thought to sound too much like the Japanese saying soh-nee which means business goes bad.^[17] 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 sued a candy producer who also used the name who claimed that "Sony" was just an existing word in some language).^[15]

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.^[18]

As a result of this persistence, Sony has now developed into a leading international manufacturer producing a variety of products throughout the electronics market, music and gaming industries, film, finance and many more besides.

Notable Sony products, technologies and proprietary formats

See also: List of Sony trademarks

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 its 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 commonly 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 its Trinitron brand name for its line of aperture grille cathode ray tube televisions and later computer monitors. Trinitron displays are still produced.

Sony launched the Betamax videocassette recording format in 1975. The Walkman brand was introduced in 1979.

1982 saw the launch of Sony's Betacam videotape family and the collaborative Compact Disc format. In 1983 Sony introduced 90mm micro floppy 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 more current media formats. In 1983 Sony launched the MSX a computer for the home and introduced the world with their counterpart Philips 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 became popular in the consumer camcorder market. In 1987 Sony launched DAT or Digital Audio Tape as a new audio tape standard alternative to CD.

In addition to developing consumer-based recording medias, after the launch of the CD Sony began development of commercially based recording medias. 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.^[19]

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 1996.

Sony introduced the MiniDisc format in 1992 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 more widely used formats like 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 software SonicStage provided with them 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 its 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.

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 its 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 its 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 its 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 its Blu-ray Disc optical disc format, which is likely to compete with Toshiba's HD DVD. As of quarter one of 2006, Blu-ray Disc has the backing of every major motion picture studio except Universal. In December 2006 Sony debuted their first Blu-ray player, the Sony BDP-S1 with an MSRP of US $999.95.

Management

On March 7, 2005, Sony Corp. announced that Nobuyuki Idei will step down as Chairman and Group CEO and will be replaced by British Sir Howard Stringer, current 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 will mark the first time that a foreigner will run a major Japanese electronics firm. Sony Corp. also announced on the same date that current president, Kunitake Ando, will step down and be replaced by Ryoji Chubachi.^[20]

Mergers and acquisitions

• 1988 — CBS Records Group from CBS. It was renamed "Sony Music Entertainment".
• 1989 — Columbia Pictures Entertainment from Coca Cola for US$3.4 billion. It was subsequently renamed "Sony Pictures Entertainment" in 1991.
• 1993 — Acquired Psygnosis Limited a computer games company based in Liverpool, UK. Psygnosis director Ian Hetherington was made Managing Director of Sony Computer Entertainment Europe.^[21]
• 2001 — Sony Ericsson a 50:50 joint venture of Sony Corporation and Ericsson AB, was established in October.
• 2002 — Aiwa Corporation in October.
• 2004 — S-LCD Corporation a 51:49(Samsung Electronics: 50% plus 1 share, Sony: 50% minus 1 share) joint venture of Sony Corporation and Samsung Electronics Co. Ltd, was established in April.
• 2004 — On July 20, 2004, the EU approved a 50-50 merger between Sony Music Entertainment and BMG. The new company was named Sony BMG Music Entertainment and, as of 2005, holds a 21.5% share in the global music market, behind worldwide leader Universal Music Group, which has a 25.5% share.
• 2005 — On April 8, 2005, The MGM Company (Metro-Goldwyn-Mayer and United Artists) was acquired by a Sony-led consortium (Providence Equity Partners 29%, Texas Pacific Group 21%, Sony 20%, Comcast 20%, DLJ Merchant Banking Partners 7% and Quadrangle Group 3%) finalised the deal to purchase the film studio for about $4.8 Billion, including $2bn in debts from Armenian-American Kirk Kerkorian.
• 2006 — Sony NEC Optiarc Inc a 55:45 (Sony 55%, NEC 45%) joint venture of Sony Corporation and NEC Corporation, was established in April.
• 2006 —Acquired digital Single Lens Reflex (Digital SLR) cameras section from Konica Minolta
• 2006 —Acquired Grouper Networks - a Sausalito based startup company that created a user generated video sharing platform and p2p technology for $65M.

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.^[22]

A parody in 2004 was made involving Garfield, the 2004 film (which ironically had mostly all negative reviews), which has David Manning giving it two thumbs up because he will like any movie. However, it was made by 20th Century Fox, not Columbia Pictures.

Digital rights management

Main article: 2005 Sony BMG CD copy protection scandal

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 extremely difficult to detect or to remove.[1] This constitutes a crime in many countries, and poses a major security risk to affected users, as well as a small drain on computer system resources. The uninstaller Sony initially provided removed the rootkit, but in turn installed a dial-home program that posed an even greater security risk — a fact that drew further criticism of Sony's actions. Sony eventually provided an actual uninstaller that removed all of Sony's DRM program from the user's computer. Sony BMG is facing several class action lawsuits regarding this matter. [2]

On January 30, 2007, the U. S. Federal Trade Commission issued a news release announcing that Sony BMG Music Entertainment agreed to settle Federal Trade Commission charges that Sony BMG Music Entertainment committed several offenses against United States federal law, including the sale of CDs containing software technology that monitored consumers' listening habits, and which "created security vulnerabilities that could allow hackers and other third parties to gain access to consumers’ computers." This settlement requires that Sony BMG allow consumers to exchange the CDs through June 31, 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.

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 (Triangle, O, X, Square). At the bottom, the copy read as "Ten Years of Passion". This outraged the Vatican as well as many local Catholics, prompting comments such as "Sony went too far" and "Vatican excommunicates Sony". After the incident, the campaign was quickly discontinued.^{[citation needed]}

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. [3] [4] [5] [6] The mayor of Philadelphia has filed a cease and desist order and may file a criminal complaint. According to Sony, they are paying businesses and building owners for the right to graffiti their walls.^[23] As of early January 2006, Sony has 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.^[24] 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.^[25]

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 virally. 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".^[26]

bleem!

Main article: bleem!

In 1999 Sony took legal action against bleem!, Sony started these law suits after they launched their policy to prevent any developer shipping software that runs PlayStation software.

In April 1999, a California court denied Sony's case against Bleem that would keep the company from publishing its PlayStation emulator for the Dreamcast. Bleem sued Sony for allegedly using its influence to halt the company's ability to successfully sell its emulator. Bleemcast was a software program that would allow some PlayStation One games to be played on the Sega Dreamcast console. Although bleem won all of its court cases the time and money lost during the cases caused the company to close down in November of 2001.

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 controller for the PlayStation 3 has no rumble feature. Microsoft Corp. was also sued for its Xbox controller, however, unlike Sony, they settled out of court. 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.

Batteries

On August 14, 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.^[27][28] 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.^[29]

Ten days later on August 24, 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.^[30]

On September 19, 2006, Toshiba announced it was recalling 340 000 Sony laptop batteries.^[31] 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.^[32]

On September 23, 2006, Sony announced its investigation^[33] of a Lenovo ThinkPad T43 laptop overheated and caught fire in Los Angeles International Airport on September 16, an incident that was confirmed by Lenovo. On September 28, 2006, Lenovo and IBM made the global recall of 526 000 laptop batteries.^[34]

On September 28, 2006, Sony announced a global battery exchange program in response to growing consumer concerns.^[35]

On October 2, 2006, Hewlett-Packard (HP) determined that it is not necessary for HP to join the global battery replacement program.^[36]

On October 3, 2006, the Yomiuri Shimbun reported that Sony was aware of faults in its notebook PC batteries in December 2005 but failed to fully study the problem.^[37][38]

On October 16, 2006, Fujitsu announced it was recalling 278,000 Sony laptop batteries.^[39] It was also reported that Fujitsu, Toshiba, and Hitachi may seek compensation from Sony over the battery recalls.^[40]

CCD

Initially, in October of 2005, it was reported by Sony that there were problems with the charged-couple 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 of 2006, the recall was broaden 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 manufactuer's and models of cameras, possibily as many as 100 models or more. Other manufactures of digital cameras, ncluding Canon, Minolta, Nikon, or Fuji have indicated they will replace faulty CCDs in thier respective models of cameras if necessary.^[41]

Lik-Sang and Grey Goods Importation

Main article: Lik-Sang

In August of 2005, Sony engaged in a legal tussle with Hong Kong import/export firm Lik-Sang, a distributor of Asian electronics. Lik-Sang had sold imported PSPs to UK customers before the UK release date, which Sony alleged was a breach of their trademark rights.^[42] Lik-Sang continued shipping PSPs, claiming Hong Kong's laws allow an item to be traded freely once it appears in a market anywhere in the world. On October 23, 2006, the High Court in London ruled the shipments of PSPs were indeed in breach of Sony's rights and that it was illegal for the firm to import the Japanese version of PlayStation 3's into Europe ahead of its official release in March 2007. The following day, Lik-Sang posted a message on their website claiming they had been forced out of business due to Sony's legal action. Sony responded in a statement^[43] saying that Lik-Sang had not contested the case, thus incurring no legal fees, and had not paid any damages or costs to Sony.

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.

See also

• Made in Japan
• Sony Corporation shareholders and subsidiaries
• Articles whose titles start with Sony
• Sony CISC
• List of Computer System Manufacturers

External links

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• Sony Corporation: Global Headquarters
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