Toshiba introduced millions to high-end TVs and portable computers. Now, it could be saying goodbye.
The 142-year-old Japanese conglomerate, commissioned by that country’s Ministry of Engineering to develop telegraphic equipment, warned in a financial report this week that there is “substantial doubt” about its ability to continue as a “going concern”.
The potential fall of the Toshiba brand comes with more than a dash of bittersweet memories.
Many people were weaned on the company’s dependable TVs and got their first taste of portable computing with the T1100, “the world’s first mass-market laptop computer” in 1985 – but have since moved on to Apple iPhones and Samsung TVs.
Toshiba doesn’t sell home appliances, and two years ago it said it would stop making and selling its TVs. It still sells laptops, accessories, hard-drives and phone systems.
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Toshiba faces a bleak future after losing a jaw-dropping US$4.8 billion (NZ$6.9 billion) over the first nine months of its fiscal year and warning the loss could balloon to US$9.2b for the full year.
The biggest culprit: The bankruptcy filing of its US nuclear unit, Westinghouse Electric, last month after delays and billions of dollars in cost over-runs in building US reactors.
The nuclear division, which Toshiba won in a heated bidding war in 2006 for US$5.4b, has been roiled by soaring cost overruns since the March 2011 nuclear disaster in Fukushima, which tempered demand for nuclear activity.
The fall of Toshiba is a cautionary tale of what happens to companies that depend on high-quality knock-off products that are priced competitively and distributed aggressively around the world.
The strategy worked through the 1980s for the so-called Big Six of Japanese electronics – Toshiba, Sony, Fujitsu, NEC, Sharp and Mitsuibishi – until competitive cycles grew faster and US, Chinese and Korean companies won on innovation.
For years, Toshiba was on the forefront of the computing revolution, crowing in one advertisement for its briefcase-sized computer that “being smaller than IBM is going to make us one of the biggest names in PCs.”
In the 1980s, it introduced flash memory, technology that would transform how we store digital photos, video games, and reams of documents on those once ubiquitous flash drives.
Its products still regularly grace electronics shows. But in the past decide, it hasn’t had a winning product, like a smartphone, that could offset its troubled bet on nuclear.
“A lack of diversity in culture, ideas and technology hurt the Big Six,” says Gerard Corbett, who spent a dozen years at Hitachi.
“Most of them got out of the TV business, for instance, because they couldn’t compete with Samsung, LG and others.”
Its gradual decline makes Toshiba something of an anomaly in tech, where the fates of companies are often measured in years, if not months, says venture-capitalist Reshma Sohoni.
“If anything, it underscores the cycle of relevance in tech,” she says. “It’s been around nearly 150 years; the window of opportunity is much smaller now.”