The next step in the evolution of Sony

  @FortuneMagazine February 27, 2014: 7:29 AM ET
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Kazuo Hirai peers past the bright stage lights to survey the thousands of technologists assembled in the Las Vegas ballroom before him. "This is the Betamax," he says, somewhat haltingly, as an image of the failed 1975 videotape format appears on a screen behind him. Laughter cascades through the room. "Now, despite Betamax being first to market and, dare I say, offering superior technology than that other format" -- more laughter, peppered by guffaws and applause -- "I'll be the first to admit, VHS won the battle for commercial success. However, before you completely write off Betamax based on its failure to become the consumer standard, think of it as an idea." A Betamax advertisement urging consumers to "Watch whatever whenever" appears on the screen -- prescient, given today's mobile-dominated world. "That was almost 40 years ago," Hirai exclaims. He smiles, and the corners of his eyes crinkle. "Forty years ago!"

You can forgive Sony's chief executive for waxing nostalgic. The 1970s were a far simpler time for the Japanese conglomerate -- a time when the company, one-tenth the size it is today, mostly made radios, televisions, and tape recorders. Fast-forward to February 2014, and Hirai announces that Sony will completely withdraw from the PC market and spin off its TV business.

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