Personal Computer News
23rd March 1985
Published in Personal Computer News #104
Toshiba Turns To Sord Swallowing - View From Japan
What do micro manufacturers have in common with Save the Whale campaigners? Answer: the Japanese are the bogeymen in both cases.
The age of Moby Dick is long since gone, and these days it's the Americans who get particularly agitated about Japanese whaling. We imagine there's a touch of envy or sour grapes about their attitude, but there's more than spite involved when a federal judge orders the US Government to take economic sanctions against Japan on the issue, as happened in Washington recently.
Oddly enough, the Japanese computer business is dominated by whales, and here it's the minnows that need protection. Toshiba, trawling along in that accidentally predatory fashion that whales have when they open their mouths, swallowed Sord last week. It bought about 38 per cent of the company and it aims to go eventually to more than 50 per cent.
When you cut a whale up, different parts can be put to different purposes - a bit of scrimshaw jewellery here, a can of oil there, cosmetics, leather-treatment and even tasty morsels both here and there. So it is with Japan's computer giants - cut up Toshiba and you'll find all sorts of products, and Toshiba is one of the less diversified of the computer giants.
Sord's problem was that it was completely undiversified and lacked the resources to support the operations that make the bigger companies virtually self-sufficient. They make their own chips, for example, and this capacity shields them from the ups and downs of the semiconductor manufacturing industry. Sord obviously recognise this weakness in its own make-up because it planned ot build a chip-making facility from the proceeds of a public share issue last year. But the share issue had to be called off not once but twice, as the first signs of basic weakness began to show through the plaster.
Sord was founded in 1970 by Takayoshi Shiina. In a country famous for microelectronic wizardry it broke a lot of new ground in the microcomputer business, and it also made a notable contribution to the case for the defence of Japan's software producers. "Very clever with hardware, but they can't write software," people used to say about us. Sord came up with Pips, a kind of multi-purpose operating system and applications developer intended for first-time users. Unfortunately, the rest of the world was using CP/M, and Pips left a little too much to the imagination for many first-time users' tastes.
The name of the product is an indication how Sord through of itself. Surrounded by diverse corporations with computer operations that ran alongside ceramics, musical keyboards, industrial machinery and the rest, Sord specialised in personal computers - it saw itself as the Japanese Apple.
In fact, its approach to computing was probably more structured than Apple's. It has machines in the 8, 16 and 16/32 bit areas. It has laphelds, stand-alone desktops, and multi-terminal systems. Pips runs across the range.
Like Apple, it grew very quickly; its best year was 1980-1981, when its sales doubled. In late 1983 it claimed to be the fastest growing company in Japan. From there, there's only one road to take - downhill.
Even Apple has joined the crowd ganging up against it. Sord relied on the personal computer business for about 85 per cent of its income, but the competition from IBM, NEC, Fujitsu, Sanyo, and latterly Apple through the agency of Canon proved increasingly stiff.
Shares issued privately fell in an Acorn-like spiral, to the point where buyers couldn't be found at any price. There were rumours of difficulties last year, and earlier this year more rumours linked Sord with Sanyo as a possible buyer.
The deal with Toshiba is described as "a comprehensive tie-up to include co-operation on technology, marketing and manufacturing". Takayoshi Shiina will stay as chief executive, and Sord will be able to use Toshiba's marketing and distribution network. Its existing products will be sold and supported under the new regime.
Toshiba, for its part, expects the tie-up with Sord to be the model for a new type of Japanese company.
A new type of company, or perhaps just an even larger whale; and one that the Americans may have to scrape the rust off their harpoons to deal with some time soon.