Akio Morita, the chairman of electronics powerhouse Sony Corp. suffered a cerebral hemorrhage Tuesday in Tokyo and is stepping aside, company officials confirmed Thursday.
Morita, who masterminded the rise of Sony from the ruins of postwar Japan, fell ill while playing tennis Tuesday. He underwent surgery to remove an egg-size accumulation of blood from his head, Sony officials said.
Although the company stopped short of announcing his retirement, officials did say that Morita, 72, would devote himself to his recovery for an indefinite period, leaving the company in the hands of Sony president Norio Ohga, who has been overseeing day-to-day affairs for the past several years.
While Morita has remained involved in various projects, his departure from Sony marks the end of an era for the once mighty, but now struggling, electronics giant, which dominated the marketplace for years.
Like the sagging Japanese economy, Sony’s fortunes of late have also faltered. The company is even more vulnerable to the yen’s strength because of its high proportion of overseas sales. For the six months ending in September, Sony’s group net profit fell by 44 percent.
News of Morita’s illness seemed to have only a marginal effect at the Tokyo Stock Exchange. Wednesday, Sony stock rose 70 yen to 4,930 and Thursday, fell 30 yen to 4,900. In U.S. trading, Sony ADRs closed up 13 cents to $ 45.13 following the news.
“It’s being taken in stride,” said a Tokyo-based trader. “At his age, you expect these things to happen. The markets are not affected to any degree. A lot of the show is already being run by his executives in the company and they know it’s not going to fall apart without him. He is really more of a figurehead than the one in control day-to-day.”
Under Morita’s guidance, Sony became one of Japan’s most successful corporations as the country surged to postwar economic pre-eminence and became one of the first Japanese firms to successfully tackle world markets. But lately , Sony has been hurt badly by the high yen and weak domestic demand.
It was Morita’s love of electrical engineering that drove him to pool $ 500 with a fellow engineer and start up a company in the remains of a bombed-out Tokyo department store just after World War II. In one of its shrewdest moves, Sony bought the rights to an American invention — the transistor — and used it in ways its originators never imagined, including radios, which rapidly began to shrink to minuscule proportions.
The company went on to shrink videotape recorders from huge machines run on vacuum tubes into compact, transistorized models that became a fixture in living rooms worldwide — although its Betamax format lost out to the VHS format developed by rival JVC.
In the early 1980s, Sony shrank its audio tape recorders even smaller, attached earphones and unleashed what would become a revolution in the world of audio — the Walkman, which became an international phenomenon, copied widely by other companies. Along with Philips, it also developed the compact disc player.
In recent years, he has sought to serve as a business “ambassador,” building better ties between Japan and its trading partners. He chairs the private Japan-U.S. Business Council, which seeks to improve relations.