Morita was out of breath when he returned to Tanigawa's hotel and said to his friend, who had been waiting eagerly to hear the result of the meeting, "Well, it went all right." The Western Electric response was positive, and Tanigawa had never seen such a delighted look on Morita's face before.
Totsuko had yet to obtain approval from MITI in Japan, so Morita hastened to sign a provisional agreement contingent upon MITI's approval. On this occasion, the Western Electric engineers said to Morita, "The transistor is a very fascinating thing. At this stage, however, it can only be used for audio purposes. You can make hearing aids or something like that. Yes, you should make hearing aids when you go back to Japan," they strongly recommended. Morita just answered, "Well, yes," though he did not see much potential for hearing aids, regardless of how he looked at the market.
The Totsuko-Western Electric agreement did not cover technology. So after signing the provisional agreement Morita went about gathering as much reference material as possible on the transistor, hoping that it would prove useful in Japan. Upon finishing his business in the U.S., Morita started out for his next destination -Europe.
Morita's first stop was Germany. Although like Japan, Germany had been defeated in the war, it boasted a great technological heritage. Morita was plagued by the same inferiority complex in Germany as he had felt in the U.S. "Will Totsuko ever be able to develop worldwide markets in competition with American and German companies?" he wondered. Morita, who had been so ambitious about one day launching Totsuko products worldwide, began to take a rather pessimistic view.
In low spirits, Morita took a train from Germany to Holland, the birthplace of Philips. In Holland Morita felt comfortable enough to relax. Holland was a small agricultural country where people were riding bicycles everywhere. "It somehow resembles Japan," Morita thought, feeling nostalgic. There was almost no industry in Holland at the time -it was a country still dependent on agriculture. One could find the word 'Holland' written on eggs sold all over Europe. Morita fully appreciated that Philips was headquartered in this small country and was exerting a worldwide sales influence from there.
After arriving in Europe, Morita realized how big Japan was. Of course, Japan was a small country compared with the U.S., but in Europe a jet plane could take you from one country to another in an hour or so, and a four-hour train ride in Holland could take you beyond its border.
Though located in the remote countryside, Philips exerted great influence on the world electronics industry. Until Dr. Philips started his business there, Eindhoven had been a rather small, rural town. Beginning with the manufacture of electric light bulbs, Dr. Philips created the Philips empire in a remote locality which had no industrial history. "What has been done by Dr. Philips can be done by us. We have a chance to rise too." Suddenly, deep courage began to fill Morita's heart.
Morita wrote to Ibuka from Holland saying, "I am deeply encouraged by the sight of Philips and am fully convinced that we too can sell our products all over the world."
Upon returning to Japan from his three-month trip, Morita reported to Ibuka immediately on his meeting with Western Electric. "Let's make something with the transistor. If we can produce transistors, that will give us a great opportunity. Western Electric strongly recommends that we make hearing aids. But what do you think?" Ibuka did not think hearing aids were a good idea either.