Calculating the future at Casio

Founded at the end of the second World War, Casio's never-say-die approach is stuff of legend, writes DAVID McNEILL

IN THE mighty corporate landscape of Panasonic, Canon, Sony and Mitsubishi, it’s easy to overlook the unsung workhorses of Japan’s huge economy.

Take Casio Computer: for more than 50 years, the electronic devices company has enjoyed solid if sometimes spluttering growth since manufacturing the world’s first all-electric calculating machine in 1957.

One of the world’s top makers of watches, musical keyboards and digital cameras, Casio still churns out calculators and is still run by three of the four brothers who started it all way back in 1946.

Japan’s crippling economic downturn, the unstoppable rise of China and even his own mortality be damned, Casio president Kazuo Kashio believes the company of 13,000 workers can double in size.

“If our products are strong, we’ll be able to grow and break out of our current situation,” says the 80-year-old boss. “Technology, innovation and strong management – the companies that have those will prosper.”

Yuichi Masuda, head of Casio’s Timepiece Product Unit, which makes the runaway-hit G-Shock, is even more bullish. “We’re looking at the recession positively because we think we can increase market share.”

Part of the wave of Japanese firms that sprang up from the ashes of the second World War, Casio’s never-say-die approach is the stuff of legend. Its rise, like rival Sony’s, mirrors the astonishing postwar development of microchip technology.

Sony famously gave Western Electric $25,000 for the use of the patented transistor, which it used to revolutionise listening habits with the mass-produced transistor radio. Casio made calculators.

One of its earliest, the 1959 pre-transistor 14-B, sits in a roped-off corner of Casio’s Tokyo museum.

A 1.5-metre monster mounted on an office work desk, the 14-B sold for the price of a second-hand car. By 1978, it had shrunk to the size of a 4mm-thick credit card. Today, there is vastly more computer power in the average cell phone.

Innovative and occasionally reckless, Casio has had more misfires than hits. Its bombs include the portable TVs, Casio-Tele – a clunky 1990s video telephone and a calculator that doubled as a cigarette lighter. Its first product was a cigarette holder mounted on a ring that allowed assembly-line workers to smoke while they toiled.

It has never lost the ability though to surprise. In the early 1970s, the company decided to dive into the mainly analogue timepiece market with its electronic watch, later launching the G-shock – a rugged line of products marketed on their ability to withstand shock and vibration. “Watches had a reputation for breaking easily,” Masuda says. “We set out to make ours tougher.”

Initially driven by demand from sports and outdoors’ enthusiasts, the chunky G-Shock design, at a time when slim-line models dominated, was inspired and eventually hugely successful.

The result today is one of the few brands (along with Citizen and Seiko) to come close to rivalling the watch-making dominance of the Swiss, whose more expensive lines have been hard hit by the global recession. Casio admits its watch sales are down too, but claims its more competitive pricing and hard-won manufacturing expertise give it the edge.

“Few can match us when it comes to knowing how to make products,” says Masuda.

Still, the hard balance-sheet realities say different. Last month the company announced a loss of $77 million for the previous financial year, sending its shares plunging by 9 per cent. Casio plans to merge its mobile phone operations with Hitachi and NEC to cut costs. Then there is the fight to stay ahead of copycats and technological rivals in Korea, Taiwan and, increasingly, China.

Kazuo Kashio is unperturbed, if cautious. “We see China as much more of an opportunity than a threat,” he says.

“In any case, we don’t think China can compete with us in the products we make.

“But we must always be careful that we don’t rest on our laurels and that we continue to innovate.

“If technology and innovation stops, we’ll be overtaken in Asia.”

The company has thrown much of its weight behind the development of digital cameras and scored a spectacular hit this decade with the Exilim line of cheap, slim models. And although its latest efforts have failed to ignite the market, it is also a major parts’ exporter: about one-third of LCD displays for digital cameras worldwide are Casio’s.

Founded by the late Tadao, his three brothers Toshio, Yukio and Kazuo – collective age about 230 – still don suits and ties and head for the company every morning, a fact that has not passed without criticism in the Japanese business press. Kazuo says he hopes to step down next year. In the meantime, the press should lay off.

“I’ve been thinking about the management of this company every single day for 50 years. Who knows it better than I?”