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Chapter One

Doctor Rocket
Goes to Disneyland

For a long time, the Japanese have been branded as imitators rather than creators. But I think it would be downright foolish to say that what Japanese industry has accomplished in the past forty years has been anything but creative ...

--Morita Akio

Among the Japanese executives assembled in the Japan Airlines lounge at Los Angeles International Airport that smoggy morning in late 1968 was one who sat apart from his fellow travelers.

    They were chatting eagerly amongst themselves, looking forward to going home, to rejoining their colleagues and families, to distributing their souvenirs--a bottle of duty-free Johnny Walker for the wife's father, a carton of Lucky Strikes for the office, a pair of Mickey Mouse ears for little Taro.

    He alone sat silent, disconsolate, as if in shock.

    His name was Sasaki Tadashi and he had seen the future of electronics. Sasaki's vision was of portable products. The first would be a calculator small enough to hold in your hand, yet cheap enough for anyone to afford. But for his dream to come true, he needed a new type of chip, one that would cut the umbilical cord that tethered electrical appliances to the wall socket. The sort of thing Sasaki had in mind would run on batteries only.

    Back home in Japan, he had begged domestic chip makers to take on the challenge, but they turned him down. So Sasaki flew to America to try his luck there. He toured the country, pleading with semiconductor manufacturers on the East Coast, down in Texas, and over in what people would soon start calling Silicon Valley. But to no avail: Wherever Sasaki went he was told, "We're too busy making chips for the Air Force, we don't have any spare capacity for you."

    Until finally, on his way back home to Japan, Sasaki had driven down from L.A. to Anaheim, home of Disneyland and also, more prosaically, of Autonetics, electronics arm of the giant aerospace conglomerate North American Rockwell. Knowing this was his last chance, Sasaki stated his case with all the eloquence he could muster.

    The order the feisty Japanese dangled in front of the Americans was huge. It would be worth tens of millions of dollars. But there was a catch: Though volume would be high, profit margins would be low. For a moment, Sasaki thought he detected a glimmer of interest in the eyes of the tall executive, Fred Eyestone, who headed Autonetics. But he was mistaken--once again the answer was a polite, "Sorry, we'd like to help you, but we're fully booked."

    So here he was, at the end of the road, having failed in his quest, returning to Japan empty handed. Then, just as the flight was almost ready to board, a voice came crackling over the public address system: "Would Dr. Sasaki please come to the information desk?" There he found a message that a helicopter was waiting to fly him back to Autonetics. At the fifty-ninth minute of the eleventh hour, Sasaki's luck had changed.

This last-minute change of fortune was merely the latest in a series of unforeseen twists and turns in an already remarkable career. Sasaki Tadashi was born in 1915 in Hamada, a small fishing port on Japan's western coast. Nearby was the home of Lafcadio Hearn, the nineteenth-century author whose romantic writings gave many Westerners their first glimpse of Japan. Sasaki grew up in Taiwan, then a Japanese colony, where his father, a former samurai from the garrison at Hamada castle, was a teacher.

    Young Sasaki was expected to follow in his old man's footsteps. And it seemed he would. Sasaki studied electrical engineering at Kyoto University, one of Japan's top schools, where in recognition of his talent his professor had promised him a job. But the Pacific War intervened to upset this plan. Sasaki joined the Ministry of Communications, where he was assigned to an aircraft maker called Kawanishi. The outfit was based in the western Japanese port of Kobe. There Sasaki did research on vacuum tubes for use in telephones, wireless, and radar.

    After the war ended Kawanishi, a minor-league zaibatsu, was broken up by the Occupation. Its vacuum tube manufacturing division was spun off to form a new company called Kobe Kogyo. Following the extensive bomb damage to most Japanese cities, it was an Allied priority to repair the nation's shattered telephone system, "bringing Japan's communications up to a standard which will meet the requirements of the Occupation forces and at the same time permit restoration of service sufficient to meet the reasonable needs of the Japanese people."

    A problem in achieving this goal was the very low quality of the domestically made vacuum tubes used in Japanese repeaters (amplifiers inserted at intervals along telephone lines to boost the signals). In fact, they could hardly handle long-distance calls. In 1947, at the expense of the Occupation's Civilian Communications Section, Sasaki was sent to the United States, where he studied modern methods of tube production at Western Electric's ultramodern factory in Allentown, Pennsylvania.

    To make full use of what he learned, Sasaki also had to catch up with the latest in tube theory. When he didn't understand something, Sasaki was permitted to engage in discussions with one of the scientists at Western Electric's research arm, the Bell Telephone Laboratories in nearby Murray Hill. The scientist was a theorist named John Bardeen. Along with two colleagues, Walter Brattain and William Shockley, Bardeen was at this time developing a more reliable amplifier for use in repeaters and, more importantly, telephone exchanges. It was to be a solid-state substitute for the vacuum tube.

    Shortly before Christmas 1947, just as he was about to return to Japan, Sasaki had a meeting with Bardeen. Normally the most mild-mannered, soft-spoken of men, Bardeen seemed uncharacteristically excited. He told his Japanese visitor that he and his coworkers had discovered a most interesting new phenomenon but he was not at liberty to say what it was. Months later, back in Japan, Sasaki would realize that what Bardeen had been talking about was none other than the first transistor, which he and his colleague Brattain had just made.

    For the first few years following the transistor's invention, the technology remained inaccessible because of Western Electric's patents. To an industrial researcher like Sasaki, semiconductors were thus of academic interest only. When Bell Labs decided to throw open the transistor patents to all comers in September 1951, by a happy chance Sasaki was once again in the U.S. His purpose on this occasion was to conclude a technical assistance agreement between Kobe Kogyo and RCA on subminiature receiving tubes, state-of-the-art, cigarette-filter-size components that were much in demand for the helmet radios then being used by tank crews in the Korean War.

    Sasaki and a colleague, Arizumi Tetsuya, heard about the transistor symposium Bell Labs had just held for its licensees. Eager to know what was going on, the pair hopped on a Pennsylvania Railroad train, which took them from Harrison, New Jersey, where the RCA facility was located, three stops up the line to Summit, the station for Murray Hill. At Bell Labs, they made a beeline for Bardeen, who obligingly told his Japanese visitors all about the transistor. He warned them that, because of their high cost, transistors might only be useful in special applications; they might not be competitive against the low-cost vacuum tube in mass markets. As a parting gift Bardeen gave the Japanese some single-crystal germanium to get them started. Arizumi was all fired up. As soon as they got back to Japan, he went straight to work together with some of his colleagues, including the young Esaki Leona. (Esaki worked at Kobe Kogyo for the first eight years of his career until a dispute with the management caused his departure for Sony, where, soon after, he discovered electron tunneling, for which he won the Nobel Prize.)

    In early 1953, Kobe Kogyo became the first company in Japan to succeed in making a transistor--ahead of Sony and other, much larger Japanese firms. When Kobe Kogyo was ready to begin mass production, the company signed a licensing agreement with RCA. (The U.S. firm was able to offer transistor knowhow cut price by virtue of a cross-licensing deal with Western Electric.)

    Kobe Kogyo's management evidently believed that they had acquired an exclusive license with RCA--in which case, it must have come as a nasty shock when RCA also issued transistor licenses to Hitachi (May 1953) and Toshiba (August 1953). Nonetheless, Kobe Kogyo was still able to beat its giant rivals to market. The company's first transistorized product was a car radio it supplied to Toyota, which in 1955 was just beginning to produce passenger cars in earnest.

    At this point, Kobe Kogyo seemed poised for the kind of growth that would propel Japan's other pioneering transistor maker, Tokyo Tsushin Kogyo (subsequently known as Sony) into the ranks of the world's leading companies. But it was not to be. For Kobe Kogyo suffered from a fatal flaw--bad management.

    The company president, Takao Shigezo, was a clever man, no one disputed that. Had not Emperor Hirohito himself given Takao a gold watch for excellent results at Kyoto University? But early success had made Takao arrogant. He believed that when his company needed money to invest in new technology, the banks would come running; he did not have to go to them. The result of this attitude was that, despite the excellence of its research department, Kobe Kogyo was perpetually short of cash.

    Another problem was that, unlike Sony, which had no existing investment to protect, Kobe Kogyo was a manufacturer of vacuum tubes. Transistors threatened to cannibalize that business. And whereas Sony president Ibuka Masaru led his troops from the front, himself becoming an enthusiastic champion of transistor technology, Takao was a mechanical engineer. Despite all Sasaki's efforts to persuade him, he never became fully convinced of the transistor's potential.

    Kobe Kogyo's initial success with Toyota soon attracted competition from Japan's largest consumer electronics firm, Matsushita. Sasaki claimed that since Matsushita held shares in Toyota, the car company felt obliged to accept the giant Osaka firm as a radio supplier. Matsushita soon brought its strength as a low-cost manufacturer to bear, elbowing little Kobe Kogyo out of the way. The experience was a salutary one for Sasaki: "Matsushita doesn't spend money on unimportant things," he commented, "whereas by comparison, Kobe Kogyo engineers indulged in technology. They didn't realize what was unnecessary."

    Kobe Kogyo's financial condition slid from bad to worse, until finally in summer 1960 the banks stepped in. It was decided that the company would be merged with Fujitsu, a telecommunications equipment supplier that could make good use of Kobe Kogyo's semiconductor expertise.

    What was Sasaki to do? There was no question of his joining Fujitsu, because he had been a director at Kobe Kogyo; that would always have counted against him. To acknowledge his share of the responsibility for Kobe Kogyo's woeful state, he resigned from the company's board. But he stayed on during the merger negotiations to look after his subordinates, and to weigh his options. By far the best of these was an invitation to return to Kyoto University to take up a professorship when the Japanese academic year began in April 1964.

    Then, just as the groves of academe beckoned, fate intervened once again, sending Sasaki's career ricocheting off in a completely different direction. December 1963 found him flying back to Japan from yet another trip to the United States. The limited range of the propellor-engined aircraft used to make Pacific crossings in those days necessitated refueling stopovers at halfway houses like Hawaii and Wake Island. Disembarking at Honolulu, Sasaki encountered a familiar face.

    This was the secretary of Saeki Akira, senior executive director of a consumer electrical appliance maker called Hayakawa Electric Industry. His boss was also stopping over in Hawaii, the secretary informed Sasaki: Would the sensei care to join Saeki-San for a meal? The two men already knew each other well. Kobe Kogyo supplied Hayakawa with components such as transistors for radios, picture tubes for televisions, and--most recently--tubes called magnetrons for use in microwave ovens.

    Cooking magnetrons were a spinoff from radar, which is where Sasaki first came across them. During his wartime research he had worked on airborne radars for detecting Allied submarines. During the 1950s, Sasaki consulted for the military on a project to build a chain of early-warning radar installations around Japan to guard the archipelago against a Russian attack. The idea then was to transfer magnetron manufacturing technology to Kobe Kogyo so that if something went wrong with one of the radars--magnetron tubes were forever burning out--the installation would not have to wait for several days for a replacement part to be flown in from America. Once again Sasaki was sent to the U.S., this time to Litton Electronics, a leading defense contractor headquartered in Redwood City, California.

    Around 1960, Litton came up with a redesigned magnetron intended for use in microwave ovens. This was a low-end component which Kobe Kogyo would manufacture for export to the United States. But Litton remained first and foremost a military contractor, and never managed to produce an oven that was suitable for use in the average household. Compared to the technological challenges and fat margins of Pentagon procurement, the fierce competition and slim pickings of the consumer market made it an unattractive target for the U.S. firm.

    Japanese companies, by contrast, were prohibited by Japan's war-renouncing constitution from the manufacture of military hardware. Microwave ovens, Sasaki figured, would be an ideal product for Japanese companies to make. The first firm he approached with the idea was Hayakawa, whose headquarters were located nearby Kobe's, in Osaka. Sasaki put together a demonstration unit. Over the next few months, he spent a lot of time explaining microwave cooking to Hayakawa executives, including Saeki.

    Sasaki's arguments proved persuasive. In 1961 Hayakawa became the first Japanese company to develop a microwave oven. The following year, the firm put the cooker into mass production. This initial (restaurant-use) microwave oven enjoyed modest commercial success. But Saeki knew that Hayakawa would need to do better if the company was to avoid being dragged under by the harsh recession that was afflicting the electronics industry during the early 1960s. Aware that Sasaki's days at Kobe Kogyo were numbered, Saeki was also mindful of the key role the latter had played in the commercialization of the microwave oven. Over a meal on the terrace of his hotel at Waikiki Beach, Saeki invited Sasaki to join Hayakawa as head of the company's newly formed industrial equipment division. After due deliberation, Sasaki accepted.

    It was an exceptionally brave decision. When he moved to Hayakawa's unassuming Osaka headquarters in April 1964, Sasaki was just one year short of his fiftieth birthday. He could have elected to take up his professorship at Kyoto University, a position of considerable status that would have assured him of a comfortable life until retirement.

    Instead, he chose to jump from the frying pan into the fire--from a bankrupt firm to one that was in bad financial shape. So bad, in fact, a rumor was going round that Hayakawa was about to be acquired by Hitachi.

    Why did he do it?

    Sasaki couldn't resist the challenge. "Everybody wants to join an elite company," he said, "because they want to have it easy. But I'd rather try and rebuild a company that has collapsed." As for academe--Sasaki would soon have become bored with life in the ivory tower. His tremendous energy required a larger outlet. Very much a creature of the real world, Sasaki relished the wheeling and dealing of business.

    Sasaki, according to those who know him, is a human dynamo. "He was a man who could be at this precise moment in twenty different places at once," said David Rubinfien, an American engineer who first met Sasaki in Japan during the latter's magnetron days at Kobe Kogyo. "He was just a marvelous person to be with," Rubinfien recalled, "exuberant, enthusiastic, wanted to do everything, wanted to conquer everywhere."

    Takashi "Mits" Mitsutomi, a Hawaiian-born Japanese American who has known Sasaki for thirty years, said, "He has tremendous drive, and he's extremely interested in getting new technology applied in new product areas .... Dr. Sasaki loves to talk, he loves to give ideas, he loves to encourage people to get into new areas--he's a tremendous man."

    Relentless, too. No sooner would Mitsutomi pick Sasaki up at Los Angeles airport than "he would read the newspaper on the economic situation, and we'd be talking nothing but business, and never is there a relaxed moment with him."

    Not even when appearances suggested otherwise. Fred Kahn, another U.S. engineer who knew Sasaki, recalled how during an investors' meeting in Silicon Valley, a jet-lagged Sasaki "fell asleep during the presentation--then he awoke and asked a germane question."

    At Hayakawa Electric, his new company, Sasaki's unflagging energy soon won him a nickname from his subordinates. Unable to keep up with his cracking pace, they called him "Doctor Rocket." "Once he takes off, he's unstoppable," said Wada Tomio, a researcher who worked under Sasaki at Hayakawa for many years. "Everybody wonders where he's gone--he's a very active person, always zooming about all over the world, gathering information from here and there."

    As a manager, Wada recalled, Sasaki was authoritarian, chastising his people if they failed to perform up to expectations. Wary of his bark, subordinates would approach Sasaki with caution. On the other hand, as Wada remembered with evident affection, Sasaki would always protect them if they got into trouble: "In that sense, he was a real boss."

    The firm that Sasaki had joined was founded in 1912 by a remarkable entrepreneur called Hayakawa Tokuji. Hayakawa was born in central Tokyo on 3 November 1892. His life would have provided excellent source material for Horatio Alger and Samuel Smiles, both of whom were still alive in 1892. Like Alger's (fictional) heroes, Hayakawa led an exemplary existence, "struggling valiantly against poverty and adversity to gain wealth and honor." Like Smiles's (actual) subjects, he was an engineer. Indeed, so dramatic was Hayakawa's life that it was actually turned into a stage play during his lifetime."

    Hayakawa Tokuji was the fifth son of a poor family of artisans. His mother, a seamstress, died when he was an infant, and Hayakawa was adopted by foster parents. Two years later, his foster mother also died, his foster father remarried, the family had more children, and money became tight. Hayakawa was treated very harshly, underfed and set to work--pasting together matchboxes--after only one year of elementary school.

    When he was nine, Hayakawa was apprenticed to a metalworking shop. Aged 19, he made, and patented, his first invention--a belt buckle that required no fastening holes, using instead a row of metal teeth to grip the leather. The inspiration was apparently Hayakawa's irritation with a character in a movie who wore an ill-fitting belt. It was a remarkably prescient concept for a time when most Japanese men still wore kimono in preference to pants. Nonetheless, orders for the buckle came pouring in. On the proceeds, Hayakawa was able to set up his own metalworking shop.

    His next important invention came in 1915. This was a mechanical pencil, dubbed in English, for export purposes, the Every-Ready Sharp Pencil. To this day, mechanical pencils (which are commonplace in Japan, unlike in the West, where they tend to be used only by specialists like draughtsmen) are invariably known, to the bemusement of nonnative students of Japanese, by the generic name shya-pu penshiru.

    Initially, however, the newfangled writing instrument was not popular among conservative Japanese stationers. Then came a large export order from a Yokohama trading company. Once foreign approbation had been conferred on the product, domestic demand took off, an early instance of the peculiar "was invented here" (therefore can't be any good) phenomenon that is still characteristic of Japan today.

    The company expanded on the strength of sales of mechanical pencils. By 1923, eleven years after he began in business, Hayakawa was the proprietor of a thriving concern that employed more than 200 people. Then on September 1 that year, disaster struck. The Great Kanto Earthquake and the subsequent fire killed 100,000 people, among whom were Hayakawa's wife and two infant sons. The catastrophe also flattened much of the city, including his factory, which was burned to the ground.

    Nor were losing family and premises the end of Hayakawa's woes. He was left with debts to an Osaka stationery firm. The solution was humiliating: He and three of his former workers moved across to Osaka where they had to sign on as employees of the stationers, teaching them how to make Sharp pencils. Hayakawa was also forced to hand over all patent rights to his invention.

    Undaunted, Hayakawa soon set up a new workshop in Osaka. He remained on the lookout for promising new products. Inspiration came from a local watch shop, in which he discovered a crystal radio set newly imported from the U.S. This was in 1924, the year before radio broadcasts were scheduled to begin in Japan. One mark of a true entrepreneur is a refusal to be put off by lack of knowledge. Despite an almost complete ignorance of the principles of radio--or of electricity for that matter--Hayakawa decided to make radio sets. In February 1925, he and his workers succeeded in building their first crystal set.

    Since radio broadcasts did not begin in Osaka until June of that year, the pioneers had to make their own test transmissions, using a manual Morse code key as the signal source. A photograph survives of Hayakawa testing the crystal set. He is shown in profile, sitting at a laboratory bench covered in electrical equipment. In attendance opposite him stands a youthful acolyte. With his left hand, Hayakawa taps out a message on the Morse key. Poised between thumb and index finger of his right hand is a cat's whisker, the wire used to pick up the incoming signal from the crystal. He is using the whisker to monitor his own transmission. On his face is an expression as serene as that of a Zen monk captured in mid-satori.

    Radio manufacturing was a good choice of business to enter. All it took was a design, some parts, and the workers to assemble them. Hayakawa Electrical Industries would be the first Japanese company to make radios, which they sold under the name Sharp, the old brand from mechanical pencil days. The sets were a huge hit with novelty-loving Japanese consumers. Monthly production quickly passed the 10,000 mark. Radios would remain the firm's mainstay for almost thirty years.

    Then came television, a new technology which Hayakawa would again be quick to exploit. In 1951, the company was the first in Japan to develop a prototype (black-and-white) set; in 1952, first to license the basic TV patents from RCA; and in January 1953, first to get commercial production underway, one month before actual TV broadcasts began. By 1955, Hayakawa was the leading Japanese manufacturer of televisions, with nearly a quarter of the domestic market.

    But despite this ability to innovate, Hayakawa Electric suffered from two chronic weaknesses, which allowed larger rivals to catch up and overtake. One was that the company remained primarily an assembler. Shortage of capital restricted its ability to invest in the facilities needed to produce key components like picture tubes. This left Hayakawa dependent for supplies on bigger, better-heeled rivals.

    The other weakness was marketing. In Japan until very recently, most electrical appliances were sold through small "mom and pop"--style local stores. Many of these are exclusive outlets for a single brand. By 1960, Hayakawa's retail distribution network was just one seventh the size of that of Matsushita, its giant Osaka rival.

    By 1960 Hayakawa himself was almost 70 years old. He was taking less interest in the day-to-day running of the company and more in philanthropic activities. These included a factory dedicated to training disabled people, especially those who had lost their sight, which he had established during World War II. The other, his pride and joy, was a nursery school he set up in 1954 to provide day care for children with working or disabled parents.

    On his grand tour of Japan in 1960, RCA chairman David Sarnoff made a point of visiting this school. An RCA staffer recorded how "our old friend Hayakawa" met Sarnoff and party at Osaka station and brought them to his home for lunch. Then Hayakawa took the visitors to the kindergarten, "where 125 boys and girls, to whom we brought individual presents, were frolicking. All of us enjoyed this experience perhaps more than anything else in Japan, and Hayakawa-San was just beaming. He then showed us a small part of his plant where he employs blind people. It was refreshing as always to talk with him. He doesn't follow the subtle conventions of his country, is direct and open."

    There is a certain pathos in this meeting between the two great entrepreneurs, born just a year apart. Sarnoff was then at the height of his fame. Who could have guessed then that RCA, the company that had invented television, would decline after Sarnoff stepped down as chairman, and would eventually be sold and broken up? And who could have predicted that this second-tier Osaka assembler of television sets, whose continued existence when the two men met was by no means assured, would during the same period go from strength to strength? Not only that, but in large part by exploiting technologies invented at David Sarnoff's beloved RCA Laboratories?

    But then "the secretive, autocratic Sarnoff had never been able to build a strong management team." In 1965 he handed over the reins of the corporation to his son, Bobby. The younger Sarnoff, whose background was in network television, felt uncomfortable with technology. He promptly spent millions on modernizing RCA's image, changing the company logo--much to his father's displeasure. Before his ultimate, ignominious dismissal, Bobby spent many millions more on diversifying into unrelated businesses such as rental cars, rug manufacturing, and chicken farming.

    Hayakawa, by contrast, was happy to delegate authority. He chose an able successor in Saeki Akira, a dynamic individual who was also a superb administrator. By the early 1960s Saeki had taken over day-today management of the firm. And it was Saeki in turn who brought Sasaki on board to provide technological vision.

The problem confronting Hayakawa Electric when Sasaki joined has long been the bugbear of consumer electronics: namely, the cyclical boom--bust nature of the industry. Most consumer electronics products are purchased during the Christmas--New Year holiday period. This means that even full-time assembly workers often work less than six months a year. Then, when a recession like that of the early 1960s hits, consumers don't buy, cash runs low, and, to cut costs, the company is forced to lay off workers.

    But if you keep having to lop off branches, Sasaki argued, a tree will never grow. He had come up with a very different solution to the problem of seasonal variation. The industry was accustomed to adding bells and whistles to existing products in order to encourage consumers to replace their obsolete old models with new ones. Sasaki felt that it was better to try and develop entirely new products that people don't already own.

    He had first put this philosophy into practice not in Japan, but in the United States. One of Kobe Kogyo's picture tube customers was a Los Angeles-based television assembler called Packard Bell. This firm had entered Chapter 11 owing the Japanese firm a lot of money for parts already shipped. Sasaki went to L.A. as a representative of Kobe Kogyo to see what he could salvage.

    "Ordinarily," he said, "in order to get your money back, you would seize some assets as collateral." To do so, of course, would be to deprive the ailing firm of its productive capacity. "But I thought, we shouldn't destroy them, we should keep them going. And that's what we did, and it proved to be very effective because they were able to pay us."

    Sasaki began his rescue operation by pondering the problem of seasonal variation. "You can't sell TVs in the spring," he explained, "you have to sell them in the runup to Christmas. The reason is that during springtime and summer people don't spend much time indoors watching TV, they go out picnicking or vacationing. When it's cold, that's when things sell well.

    "So I thought of things you could sell that could be used outside, but that don't require a lot of investment to make. And one of the things I suggested was a wireless remote-controlled garage door opener. It was easy to produce, and it became a big hit product."

    When he joined Hayakawa, Sasaki recalled his experience with Packard Bell. He asked himself what sort of product would make a good locomotive to pull the ailing firm out of the recession? His conclusion: an electronic calculator.

    This in itself was not an original idea. In the early 1960s, electronic calculators were a set of new technologies waiting for someone to assemble them, just as the transistor radio had been ten years earlier. It was a matter not so much of who would get there first, but of who would pursue the technologies to their logical conclusion. And this is where Sasaki's vision of portable products--and his determination to realize that vision--were to prove crucial.

The fuse that ignited what would later come to be known as the Calculator Wars was a compact desktop machine called the Amita Mark 8. This was introduced in 1962 by an obscure English company called Sumlock Computometer. The Amita was based on miniature tubes of the type that Kobe Kogyo manufactured. Which is why Sasaki, as a director of Kobe Kogyo, was well aware of calculators.

    Conventional office calculators, like ones that the Kashio brothers had recently formed a company to manufacture, were based on electromechanical switches called relays. The Casio Computer Company was founded on 1 June 1957. The new firm's president, Tadao, the eldest of four brothers, came from origins every bit as humble as those of Hayakawa. Kashio (born 1917) was a near contemporary of Sasaki. His family were dirt-poor rice farmers. Tadao began his career at age 13, as a shop boy at a company that recycled oil cans. Though physically frail, Tadao had tremendous drive, and his brother Toshio turned out to be a talented inventor.

    Their first product, the Casio 14-A, employed 342 relays. The 14-A's relays were housed in a cabinet on which the typewriter-size key-entry terminal sat. The calculator was 40 centimeters deep, 70 centimeters high, and 1 meter wide; weighed 125 kilograms; and cost [Yen] 480,000 ($1,333).

    When performing calculations, the relays made a loud "ka-ching, ka-ching, ka-ching" noise, rather like the cascading signboards that announce arrivals and departures at airports. Desire for quieter calculators was one of the stimuli that prompted Canon, which would ultimately become the third-largest Japanese calculator maker after Sharp and Casio. (Canon was a big user of calculators for designing camera lenses.)

    Trading companies like Nissho Iwai and Itochu were importing the Amita for sale in Japan. The British machine's success with Japanese customers left would-be local manufacturers in no doubt that if you could make calculators, you could sell them. At the same time, the Amita's miniature tubes suffered from reliability problems. Like telephone exchanges in the 1940s, they were crying out for replacement with a more dependable switch--such as the transistor. But the companies that had transistor knowhow were not office equipment makers like Casio, they were consumer electronics firms like Hayakawa and Sony.

    In the early 1960s, an enthusiastic Sony engineer named Uemura Sanryo designed a prototype transistorized calculator. The company proudly displayed the machine at the 1964 New York World's Fair. Three years later Sony marketed a desktop calculator under the name SOBAX, a derivative of "solid-state abacus." But for once, Sony's visionary founder Ibuka Masaru seems to have had a blind spot. "Our products are for the consumer," he grumbled, "an electronic calculator just won't sell."

    Later on, as dozens of Japanese companies leapt into calculator production and a brutal price war ensued, Sony cofounder Morita Akio made the decision to pull out of the market. It was one he would later come to regret, criticizing himself for "lack of technical foresight." "[H]ad we stayed with calculators," he wrote, "we might have developed early expertise in digital technology, for use in later personal computers."

    In the early 1960s, Japanese companies across the industrial spectrum were looking for new opportunities to grow. Canon, for example, wanted to diversify out of the saturated camera market. Hayakawa, after a decade of continuous growth, was beginning to lose market share in televisions and radios. To both firms, the office equipment market--then exhibiting growth rates of 25 to 30 percent annually--looked extremely attractive. Canon would shoot for copiers and calculators. Hayakawa opted, among other things, to develop computers?

    But in its wisdom Japan's Ministry of International Trade & Industry had decided that in order to foster a strong domestic computer industry, competition in computers should be restricted to just six big firms--Fujitsu, Hitachi, Mitsubishi, NEC, Oki and Toshiba. All six were based in Tokyo, which made lobbying the government much easier. Lowly, Osaka-based Hayakawa was cut off from government R&D subsidies, and shut out of a market that in large part still consisted of government procurement.

    As an alternative to computers, Hayakawa chose a lesser, but still challenging target: calculators. Three young researchers were dispatched to Osaka University to learn about them from a professor who was deemed to be something of an expert on the subject by having translated a book about digital logic. They formed the nucleus of the team that Sasaki would lead.

    Hayakawa launched its first calculator, the Sharp Compet CS-10A, on 30 June 1964, four months before the Tokyo Olympics, the event that celebrated Japan's coming of age as a global economic power. The Compet is described in Sharp's corporate literature as "the world's first all-transistor-diode calculator," presumably to differentiate it from Sony's all-transistor SOBAX, which preceded it by a few months. But Sony's machine was only a prototype, whereas Hayakawa's was put straight into mass production. Since 1984, the Compet has been on permanent display at the Science Museum in London. No calculators are displayed at the Science Museum in Tokyo.

    A desktop model resembling a cash register, the Compet weighed 25 kilograms and cost [Yen] 535,000 ($1,486), about the same price as a contemporary Japanese family car. To the modern eye the Compet is a clumsy-looking machine, mounting more than 100 keys on its front panel. (Six months later, on its first calculator, Canon would introduce the familiar phone-type ten-key pad, which quickly became the industry standard.) But to makers of relay-based calculators like Kashio Tadao, the Compet's compact size and superior performance came as a nasty shock. Kashio described his reaction on seeing the new machine: "It felt like cold water had been thrown in my face."

    Bigger shocks were in store. Transistor-driven calculators soon became established--in 1965, one year after the machines hit the marketplace, Japanese manufacturers sold a respectable 4,355 units. To expand the market and improve reliability, the logical next step was to switch from discrete semiconductor components to the new integrated circuits.

    Better known as "microchips," these were fingernail-size squares of silicon on which many transistors could be laid down and connected up. The Compet contained 2,830 individual transistors and diodes. By 1968, a calculator like the Canon 161S used only 160 discretes: Its 120 chips did the rest. But the 161S was still a desktop model, and it still cost over $1,000.

    The next step in the calculator's evolution was not logical. It was, rather, the product of vision. Around 1965, two men as far apart geographically (and as similar in their strategic thinking) as Sarnoff and Hayakawa had independently come up with the idea of the calculator as something much bigger than a specialized office tool. One was Sasaki. The other was Patrick Haggerty, chairman of Texas Instruments, the company that made the first silicon transistors and that in 1958 invented the integrated circuit.

    Haggerty's fundamental conviction was that microelectronics would become--to use his favorite word--pervasive, would eventually permeate every aspect of life. By the mid-1960s, however, the microchip was still largely confined to military applications, in particular, to aerospace, where its small size and light weight made the chip ideal for the likes of missile guidance systems. Such applications were, Haggerty felt, peanuts compared to the microchip's potential. He was forever trying to think up new ways in which integrated circuits could be used.

    Often ideas came to him on airplane trips. The idea of a calculator small enough to fit into the palm of your hand occurred to him on one such trip in the fall of 1965. As it happened, sitting next to him was one of his brightest engineers, Jack Kilby, who during his first month at TI had invented the microchip. Before the plane landed, Haggerty had enlisted Kilby to build the device.

    Haggerty's goal in developing the handheld calculator was not as a product, but as a demonstration to aid sales of TI's integrated circuits. Ten years previously, the same trick had succeeded brilliantly with the transistor. Haggerty had been determined to get into transistors despite the fact that, as he himself put it, "not one single hour of effort had gone into research and development on semiconductor devices at TI, nor was there anyone on the payroll, not anyone, who had any previous experience or background in the field." It was an attitude not unlike that of Hayakawa to radios.

    Haggerty kept pestering Western Electric for a license to transistor technology. To show that he meant business he took night courses in physics. The Bell people doubted whether TI was up to the challenge, but eventually Haggerty's persistence paid off. When transistor licenses were first offered in September 1951, TI mailed Western Electric a check for $25,000 the next day.

    Having mastered the intricacies of transistor production, it was clear to Haggerty that "a dramatic accomplishment by Texas Instruments in the field of semiconductors was needed to awaken potential users to the fact that the devices were usable now." To this end, he initiated a full-speed-ahead R&D program to build a pocket transistor radio.

    When this was successful, Haggerty had his marketing director, Buddy Harris, contact "every major radio manufacturer in the United States by phone, telegram or letter," much as Sasaki would later importune every major chipmaker to get them to make what he wanted. And with similar--i.e., negative-result: "Their attitude was wait-and-see," Harris recalled.

    Eventually, Haggerty and Harris found a small company that was prepared to manufacture transistor radios for them. The resultant product was a huge success. Texas Instruments sold millions of transistors to radio assemblers. And the little receivers drew the attention of Thomas Watson, Jr., whose company, IBM, would become one of TI's biggest customers.

    Despite this triumph, Haggerty later regretted that TI had not managed to go one step further. Pricing the radios a little higher would have given the Texans extra cash to develop other consumer products themselves. Instead of being just a components supplier, Haggerty speculated in a 1980 speech, "I think the likelihood is very high that we would have been the Sony of consumer electronics."

    Texas Instruments could conceivably also have been the Sharp of consumer electronics. In 1967, Kilby and his team delivered what Haggerty had ordered-the world's first handheld calculator. It was a magnificent technical accomplishment. They had boiled down a lab bench full of equipment into just four chips that fit into a box the size of a paperback book. Then, as Jerry Merryman, one of Kilby's collaborators on the project recalled, things started to go wrong:

    "What they did was they assembled a marketing task force to try and evaluate the market for the thing. And since it was new, a revolutionary thing, they missed the major portion of the market. They went along the conventional line-the world has so many hand-crank adding machines, we'll get 12 percent of that market, so many motor-driven calculators, we'll get 25 percent of that market, etcetera, etcetera. And they far underscoped the market, because the thing created a market that couldn't have been visualized. Y'know, there's one in the kitchen cabinet that the housewife has-nobody foresaw that"

    Nobody, that is, except Sasaki Tadashi. It would be 1970 before Kilby and Merryman's design saw the light of day, in the form of a commercial product called the Pocketronic. And even then the design would be manufactured by Canon, not TI. Not until 1971 would Texas Instruments enter the calculator market in its own right. By that time Japanese rivals like Sharp (as Hayakawa become known in 1970) and Casio were firmly entrenched. And, despite TI's best efforts to displace them, there they remain to this day.

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