Company history

Kataoka Katsutaro had left Toshiba and was running a junk shop in Kanda when he noticed how few of the variable capacitors circulating in the postwar market were any good. That gap — nobody was bothering with quality — was the only opening available to an engineer with no proprietary material and no proprietary process. In November 1948 he founded Kataoka Denki with ¥500,000 of capital and twenty-three people, making rotary switches and variable capacitors and selling them in Akihabara under the Alps brand. He installed his elder brother Kataoka Nobunao as president and ran the company himself as executive vice-president — an unusual arrangement he kept for sixteen years.

The Korean War made the business. Radio output was still feeble in January 1950; when war broke out that June, Kataoka ordered a 30% production increase and the company finally found its footing. He refused to trade quality for volume — “no parts maker that competed on cheapness has ever lived out its life,” he said — and rode out the wave of bankruptcies that followed the 1953 armistice on quality alone. Headcount passed a hundred in 1952; VHF tuners came in 1954, ahead of the industry, as television broadcasting began, and volume controls in 1958. Switches, capacitors, tuners and volumes — the four pillars — were all in place, and the rotary switch was certified to Japan Defence Agency standard in 1958 and to US military specification in 1959. Fifteen years after founding, the company had ¥500m of capital and 2,700 employees.

In 1961 it became the first electronic-components maker to go public on the Tokyo over-the-counter market, and listed on the second section of the Tokyo Stock Exchange that October. As export business grew it was renamed Alps Electric in 1964, and Katsutaro finally took the president’s chair himself; the Furukawa plant in Miyagi opened the same year, the first of the Tohoku factories. Motorola took tuners in lots of 170,000 and GE ordered 250,000 capacitors. Behind the growth was what the trade called “Kataoka diplomacy”: the president personally touring the big set makers, with a reporting system that carried what salesmen heard to development and production within a day. More than nine-tenths of output was built to order, and reading the customer first was the whole of the advantage.

Supplying parts turned out to be prosperity without profit. Sales rose, but dependence on Motorola and the royalties owed to it left the margin thin — the company was enriching its customers. In May 1967 Alps set up Alps-Motorola, a joint venture that took a components maker into finished goods, and with it the gross margin of its own brand. Rivals said openly that a parts supplier moving into sets would make the president’s customer rounds awkward, and they were right about the risk. Alps bought out Motorola’s stake in 1978, renamed the business Alpine, and in North America deliberately avoided the mass merchants, selling high-end car audio through specialist dealers and stepping out of the price war.

In 1981 Alpine co-developed the world’s first car navigation system with Honda, and listed on the TSE second section itself in 1988. The parent meanwhile passed ¥100bn of sales in the year to March 1980 and ¥310bn five years later, catching the component demand of colour televisions, video recorders and office machines in turn; Nikkei Business called it a brilliant machine shop with foresight and agility. The product line had by now widened from the original capacitors and rotary switches through slide and push types, turret, FM and UHF tuners, tactile switches, potentiometers and rotary encoders — nearly everything that goes inside consumer electronics. The nickname was the “department store of components”, and parent and subsidiary running in parallel was at its most dazzling.

Sales peaked above ¥350bn in the year to March 1991 ($2.6B (¥350bn)), then fell for five consecutive years to the ¥210bn range by March 1996. The part count had swollen to some 120,000 items and research money was scattered across all of them. Kataoka Masataka, the founder’s third-generation successor, put it plainly: the bubble had brought orders without asking, the company had become passive, and it had never produced a strength of its own. Overseas production sat in the mid-twenty per cents against roughly 70% at its rival Mitsumi — a fair summary of the structural problem.

The response, in June 1993, was cost: 1,300 voluntary redundancies, three Tohoku plants closed, the catalogue cut from 120,000 items to 80,000, a divisional structure to speed decisions, and offshore production lifted past 40% by 1996. But Masataka knew what it had not achieved. “TDK has ferrite, Kyocera has ceramics — things nobody can copy. Ask what Alps has, and there is no such strength.” The diagnosis was clear; the prescription was not.

Sales reached about ¥690bn in the year to March 2008 before the financial crisis knocked them to ¥540bn with a ¥26.5bn operating loss, and to ¥490bn by March 2010. Fifteen years after the restructuring the department-store character was unchanged, and the question of which markets to concentrate on had simply been deferred again. Masataka served twenty-four years and met two crises; both times the answer was cost reduction rather than choice. Under sixty-four years of family management, deciding what to give up was structurally the hardest decision to take — every business had been built by a father or defended by oneself.

In June 2012 Kuriyama Toshihiro, an engineer trained in science at Kyoto University, became the first president from outside the founding family. His message for three years was blunt — increase the work — and it came with numbers: ¥200bn in automotive, ¥100bn in smartphones. He reorganized the company by function and pulled five engineering units onto one site so technology could move between businesses. Operating profit, $69.7M (¥7bn) in the year to March 2013, reached about $551.3M (¥60bn) by March 2016, roughly ninefold. The break-even reduction his predecessor had ground out finally met an agenda for growth.

In July 2017 Kuriyama announced the merger with Alpine. As cars turned electric, intelligent, shared and connected, the argument was that components and finished systems had to be supplied together as a platform. Alpine’s minority holder Oasis Management fought a proxy battle over the exchange ratio; the extraordinary general meeting of December 2018 approved the deal with about 70% in favour, but stripping out the parent’s own votes left the margin among ordinary shareholders narrow. In January 2019 the company became Alps Alpine, closing fifty-two years of parent and child running side by side.

Proving the merger in profit is another matter. The module and systems business that carries the old Alpine operations was still around ¥1.1bn in the red in the year to March 2024. In 2024 the medium-term plan was torn up in favour of structural reform, with revenue above ¥1 trillion projected for the year to March 2026 — some 200,000 times the ¥500,000 of capital Kataoka Katsutaro started with. The remaining task is the one the company has always postponed: to stop being a machine shop that makes whatever is asked, and become a supplier that has chosen what it is for.