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Amar Bose in Fortune's Famous Five
IANS Wednesday, September 29, 2004
NEW YORK: Amar Bose, chairman of acoustics major Bose
Corp., has been featured by Fortune magazine in its
annual roundup of five visionaries, giving a rare,
personal insight on how he created his name-brand
company.
A former professor of Massachusetts Institute of
Technology (MIT), Bose has been featured along with
Jim Koch of Boston Beer, Catherine Hughes of Radio
One, Anthony Maglica of Mag Instrument and Andy Taylor
of Enterprise Rent-a-Car.
"Bose, who still owns most of the $1.7-billion
company, reinvests all earnings into R&D. That
approach has created cult-like fans and innovative
products - its wildly successful 'Wave Radio' took 14
years to create," says Fortune.
The only Indian American to figure in the latest
Forbes issue of 400 richest Americans, Bose recalls
how he bought a radio kit when he was all of 12 in
1943 and, in building it, learnt how to read schematic
diagrams and repair radios.
"My father, an immigrant from India who used to sell
imported mats and rugs, would go around to the
hardware stores where he used to sell them and talk
them into letting me repair the radios that their
customers would bring in," he says.
"It was a good business - no one was making new radios
because of the war effort, and many of the radio
repairmen had been drafted," he says, and adds, "I
even hired a couple of employees."
But it was in 1956, when he was finishing his
doctorate at MIT, that he bought his first hi-fi
system, played some violin records and found that the
sound wasn't right.
"Either the manufacturer was cheating on the specs, or
the specs were not meaningful. It turned out it was
both, by the way. So I started working in the MIT
Acoustics Lab to find a solution," he recalls.
He says his first product did not come out until 1965
- a speaker in the shape of an eighth of a sphere that
could fit into a corner and reflect sound around the
room. It eventually evolved three years later into the
company's 901 system.
"It was much different from anything that existed - I
was able to patent it, but it was a hard sell at
first. The 901 had no woofers and no tweeters," he
says. The product went on to do well after he made a
seven-minute audio presentation.
Bose, nevertheless, says that the biggest crisis he
ever faced was in the early 1980s, when interest rates
rose to 22 percent, technology companies were going
down, and banks put all sorts of restrictions on
loans.
"We were in the thick of developing our new car audio
system for General Motors. The situation was pretty
scary because it could have forced us to go public to
raise capital, something I vowed I would never do," he
says.
Recalling how he managed to hang on, Bose says he got
a call to visit Detroit when he told GM that his bank,
which had given Bose Corp. a $14-million loan, was
trying to constrain the company.
The chief financial officer, who "loved" Bose's
product, said: "'You've been working with us for
almost a year now, and you've never asked for a
cent... you've gone your mile a long time ago; it's
time we go our mile'."
The GM executive called a bank in Boston and asked
them to assume a loan to Bose Corp. without
constraints, recalls Bose.
"That's what saved us. People just would not believe
that a company as large as GM would do such a thing,"
he says. GM also sent equipment worth $700,000 without
expecting Bose Corp. to pay for it.
What is next from Bose's stable? "Our latest product
is a new car suspension system," Says Bose. "We've
worked on this system and tested it for 24 years now,
and are finally ready to show it to the auto
companies."
The 73-year-old professor-entrepreneur, however, says
he has no clue about its market potential. "We just
know that we have a technology that's so different and
so much better that many people will want it."
Today's News
• Computer Associates to cut 800 jobs
• US lifts sanctions against ISRO centers
• Kyocera sets up design unit in Bangalore
• MS launches XP lite for Indian market
• Convergys to acquire its Indian arm
• Indian American wins $500,000 research grant
Technology
• Hutchison Telecom to spin off India unit
• 2 more IT parks to dot W Bengal
• ShareLogic to invest in Hyd center
• CA slashes ex-CEO Kumar's perks
• i2 Technologies' new facility beams
high-innovation
Business
• Indian economy grows 7.4 percent first quarter
• Rules eased for issue of fresh equity to foreign
investors
• Gulf Air launches 'Indian Experience' tourist
package
• India's dairy equipment finds growing market
overseas
• Ramco launches operations in Dubai
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