Sony would be in deep trouble unless IBM bought stock. They had to weather this crisis somehow. In fact, Sony's crisis had very personal implications for Yoshii as well.
Yoshii had joined Sony in 1961, just before Sony issued its first ADR stock. At this time, Yoshii had bought 20,000 shares of Sony stock. With the six million yen he had received in retirement pay after 30 years at Mitsui Bank, he had bought 10,000 shares and then used the stock as collateral to buy another 10,000. At 590 yen per share, the 20,000 shares were valued at close to 12 million yen. Morita wondered if Yoshii could handle an investment of such proportions.
When Yoshii had bought them, Sony was on an upward trend, and he was not worried. With the equalization tax, though, the stock he had bought at 590 yen dropped to 250 yen. Yoshii, who had invested his entire retirement capital and even gone into debt, was in trouble.
Luckily he had bought the first 10,000 shares for cash. The problem was the loan for the remaining 10,000 shares. He was mocked because even four years after joining Sony, he had to use nearly his entire paycheck to repay what should have been a wise investment. His colleagues from the bank also mocked him for losing half of his investment, which represented a large portion of his life savings. Still, as the owner of 20,000 shares, Yoshii's predicament did not begin to compare with the magnitude of Sony's plight.
Just before Yoshii was about to go to the U.S. to visit IBM, he received a call from the bank. "Your collateral is no longer sufficient to cover your loan, so we'll have to sell the stock when it reaches 300 yen a share." The disheartened and resigned Yoshii headed for IBM headquarters.
IBM's size far exceeded Yoshii's expectations. He was particularly astonished to find that IBM had executive cafeterias for each level of the managerial ranks. While waiting at one of these cafeterias for the chairman of IBM, Yoshii became skeptical. Would IBM consider Sony's request? Things being as they were, however, he had no choice but to give this sales pitch his all.
I'm asking you to invest in Sony stock. The reasons why you should buy into Sony are..." Yoshii explained the situation intently. The financial coordinator of the international section was called and everything was finalized on the spot. IBM bought 500,000 shares at 633 yen each for a total of 300 million yen.
Sony was saved. Thanks to this purchase, Sony's stock rebounded and triggered a foreign investment boom in Japan. Sony stock jumped to over 1,000 yen per share. Some worried that the leap in price would lead to a takeover by foreign capital.
But Sony spokespeople responded by stating,"Stock prices should be a reflection of the corporate condition. Foreign investors have simply pointed out that Sony's stock was undervalued. Everyone is making an issue of foreign capital, but as long as business continues in an upward trend, all worries about foreign takeovers are groundless. Besides, Japan benefits from the inflow of foreign capital. In a capitalistic economy, it is not only xenophobic but meaningless to take issue with whether investment capital comes from home or abroad." This stand put all doubts to rest.
In this way, Sonys efforts in both securing foreign investment and issuing ADR stock represented the history of capital procurement for all Japan.
Overshadowing the exciting news of the Sony Building and successful foreign investment bids were the diligent efforts of the Chromatron development team.
Completed and announced to the public in September 1964, the Chromatron color TV was displayed at the Sony Building and was the focus of much attention. Nonetheless, mounting production costs and its tendency to malfunction made mass production unfeasible.
Numerous practical problems not addressed in Dr. Lawrence's theory arose when producing an operational model. These included troubles derived from the use of high voltage and difficulties in insulating against it. The scanning stripes, which make up the fluorescent screen, must be so thin as to not be detected by the naked eye. At least 270 to 300 stripes are needed for picture resolution. When compressing the stripes, however, the space between the color switching grid wires must be proportionally narrowed. The precision needed to focus the electron beam through the narrowed grid requires high voltage. This, in turn, requires high performance insulation, which is technically difficult. Naturally, the insulation material must tolerate high voltage. The problems involved in determining what materials to use for insulation and how to affix it were not easily resolved. Since the insulated parts were set inside the cathode-ray tube, there were problems creating and maintaining the proper vacuum level inside the tube. The more tests they ran, the more problems they incurred.
To double the brightness of the picture, the development team devised aluminum film for the back of the fluorescent material. Due to high voltage, however, the thin aluminum film was often drawn toward the color-switching grid. As a result, the display would show dark spots in places where the coating had chipped and glittering patches where it had stuck to the grid. Eventually, as large sections chipped off and stuck to the grid, it would short circuit and the switches would stop functioning. Such electrical defects developed one after another.
To compound matters, etching the phosphor was much more difficult with Chromatron than with the shadow mask process. Compared to the optical printing method of the shadow mask process, which etched the phosphor stripes using the rectilinear propagation characteristics of light, the electron beam printing method used in Chromatron involved etching after the cathode-ray tube was assembled. This was extremely time consuming -- in all, one phosphor stripe alone required from forty minutes to an hour to etch. Thus, even if a printing machine was in full operation 24 hours a day, it could only print 24 stripes a day. In order to meet demand within the eight hour working day, Sony would have to buy dozens of printing machines. In any event, it was not a very productive process.
There were no simple answers, research expenses continued to mount. Yoshida, Miyaoka and Ohgoshi, leaders of the Chromatron team, went through one difficulty after another. At this rate, Sony would never claim Chromatron color TV as its fifth innovative product. In fact, those involved considered it more of a "kuro-matron" than the Chromatron, "kuro" meaning struggle in Japanese,.
"Are you sure that the shadow mask doesn't deserve reconsideration?" Ibuka suddenly brought this up at a board meeting. It seemed that the ever confident, resolute Ibuka had nearly lost hope. The Chromatron situation was that serious.
The more Chromatron sets they made the greater their losses. Pouring any more funding into the development of Chromatron seemed concomitant to "shinju" or double suicide.
"This is all my fault." As president, Ibuka blamed himself for the Chromatron fiasco. Nonetheless, Ibuka had his pride -- not so much as a businessman, but as an engineer. Now, if ever, was the time to back up his dejected engineering staff.
"Start looking for a process to replace Chromatron. This time I will act as team leader from start to finish." This was Ibuka's way of taking responsibility.
Morita provided vital support. He told Ibuka, "Don't worry about funding. I will take care of it. Develop the project exactly as you wish." From that day fourth, Ibuka went to the laboratories daily to oversee the new project.
In the summer of 1966, Yoshida went to the U.S. to research the market and to inspect the portable color television which General Electric had announced the previous year. This 13-inch set used a shadow mask system with three electron guns in-line. Yoshida received some inspiration from it, but decided that its technology could not easily be applied to sets larger than 13 inches. Yoshida found RCA's advances even more startling. The brightness of their picture had greatly improved. This was due to the switch in fluorescent material from sulfide to rare metals. In addition, RCA was producing about 20,000 sets per month. Yoshida was amazed, especially considering the production rate of 1,000 a month at Sony. In his consideration, RCA's set was a perfected product.
"If we can't begin mass production by 1966, then we'll have to give up the Chromatron and switch to the shadow mask system." Upon receiving Yoshida's report, Sony top management reluctantly gave the okay to consider the switch to the shadow mask process.
Yoshida, however, could not bear the thought of bowing to RCA's technology. Nor did he intend to let the five years of hard work that the staff had devoted to Chromatron amount to nothing. There had to be some solution to this dilemma. Just when everyone else had given up hope, Yoshida offered a gamble of an idea in sheer desperation.
Taking a hint from GE's portable TV, Yoshida suggested reforming the electron gun. "See if you can run three electron beams through a single electron gun." The Sony staff was cool to the idea. It seemed from the beginning nothing more than an experiment to prove the futility of the idea. Miyaoka was among those who wondered whether "Mr. Yoshida had gone nuts." Miyaoka grudgingly ran the experiment, in part, simply because it was an order from the top.
Common sense said it was impossible. But the results contradicted this. Upon hearing the results, Ibuka thought, "This sounds as though it'll work! I think we should go with it." Ibuka immediately called Miyaoka to ask whether he considered the new gun viable. Miyaoka really was not sure. On this day, however, he had a special reason to reply in the affirmative. Miyaoka was an avid cellist, and it was his rehearsal day. Any answer other than "yes" would have tied him up answering Ibuka's questions and make him late for practice. So Miyaoka answered "yes" and left for practice.
In December 1966, the prototype of the new electron gun was completed. The test results on a seven-inch Chromatron set were startling -- it gave the sharpest picture yet. With this, future prospects finally brightened.
Next Ibuka and his team tested the effect of the new three gun in-line system on a shadow mask screen. The results were excellent. They worried, however, that using this with the shadow mask would dominate the new technology they had developed. Or worse yet, the new system might underscore their failure with Chromatron.
There had to be some way of incorporating the shadow mask's merits into a process that provided even better quality than with the shadow mask done. Their reputation as innovators was at stake. Once again the entire engineering team gathered for days of brainstorming sessions. Despite his confidence in his engineers, Ibuka secretly worried whether it was not smarter to accept defeat and resort to another method. Before his troops, however, he remained dauntless and confident, always giving encouragement and inspiration.
Ohgoshi provided a needed breakthrough -- the concept of the aperture grille. This grille consisted of narrow vertical stripes photo-etched onto a thin metal plate that was stretched over a frame. The electron beam penetration rate was 20%, a large improvement over the shadow mask's 15% penetration rate. And the woven grille resembled the Chromatron. It was a lifesaver. Or so they thought for a short while.
Once again, problems appeared in the application stages. Due to the vibrating metallic tape in the aperture grille, the electron beam could not find its target. This resulted in uneven color. Ibuka, however, pulled Ohgoshi from this pinch. He merely stretched a couple of tungsten wires across the grille -- a simple solution, but it did stop the vibrations.
Ohgoshi also took on the job of designing the glass envelope for the cathode-ray tube, by molding a model from gypsum. Usually a blueprint would be sent to a professional component company, but Ohgoshi insisted that it was simple enough to do by himself.
On the evening of October 15, 1967, the completed glass envelope was delivered to the plant. The research room was humming with activity -- they were about to assemble the new cathode-ray tube. Each group of engineers worked silently on their allotted assignment: integrating the electron gun, affixing the aperture grille, applying the fluorescent material to the screen, etc. Finally, after degassing, the new cathode-ray tube was completed. By then, dawn was on the horizon.
After connecting the electrical circuits, a new color television was born. After final adjustments, it was finally tested. The incredibly bright screen overflowed with dynamic color. Everyone could only stare at the screen in silent amazement. Ibuka and top directors came running upon hearing the news.
"Everyone, it was quite a struggle, thank you..." Ibuka wanted to offer more words of encouragement, but could not. They had finally reached the end of a long and winding road.
The new color television was named Trinitron -- a compound derived from "trinity," meaning the union of three, and "tron" from electron tube.
On April 15, 1968, The Trinitron was announced at a press conference at the Sony Building, where the reaction of both foreign and Japanese reporters was better than expected. At the end of the news conference, Ibuka made a comment that no one expected. "Trinitron will go on sale in mid-October, and by the end of the year, we'll produce 10,000 sets."
The research team member stood there stunned. No one could believe what was just said. They had just finished producing a mere 10 test models. How could they shift to mass production in less than half a year?
I'd like to wring his neck..." Yoshida scowled menacingly at Ibuka.
Ibuka, apparently heedless of the feelings of Yoshida and the others, assumed a look of nonchalance. His expression seemed to say,"I know you guys can do it!