The company was originally established as a research and development firm in electronics and optics but later became known as a manufacturer of quality audio products.

In the 1950s, Nakamichi developed one of the first open reel tape recorders in Japan under the Magic Tone brand.

Because of its experience in manufacturing magnetic tape heads and equipment, in 1967 the company started making tape decks for a number of foreign manufacturers including Harman Kardon, KLH, Advent, Fisher, ELAC, Sylvania, Concord, Ampex and Motorola.

The Nakamichi 1000 and 700, made in the mid-1970s, had three heads, a dual capstan drive that reduced wow and flutter, and Dolby-B noise reduction to improve the signal-to-noise ratio.

The dual capstan drive ensured superior head-to-tape contact, essentially eliminating reliance on the problematic spring pressure pads built into cassette housings.

(Later models were fitted with pressure pad lifters that further improved tape travel stability and reduced head wear.)

Competitor cassette decks offered Ferri Chrome (IEC TYPE III) whereas Nakamichi chose not to do so.

The 1000ZXL and 700ZXL had full metal capability as well as normal and high bias abilities and had built-in computers for calibrating the decks to a specific tape.

The user would use this function (activated by an "Auto Cal" button) to optimize the deck to a specific brand of tape to get best recording results from every cassette.

Nakamichi found that this pad provided uneven and fairly inaccurate pressure and was therefore inadequate for reliable tape/head contact.

In 1989 Nakamichi, along with Pioneer, teamed with Toyota Corp. to produce a premium sound system in its Lexus line of automobiles.

In 1990, Nakamichi introduced the music bank in its CD players which was based on a single loading tray concept with a total capacity of 7 CDs.

Nakamichi further enhanced the music bank system in its 1992 offering (MB line) touting the quickest changer in the market.

However, the quick changer concept experienced frequent jamming in its machines and as a result, required the company to redesign the mechanism in 1994 with a slight delay during the loading process.

In fact, its presence in the rapidly growing audio/video arena was modest at best[citation needed] with its Sansui sourced [5] AV-1 and AV-2 receivers (introduced in 1991).

Without it, its line of preamplifiers and power amplifiers were compromised; its technological advantage, more important in the high-end audio market, was lost.

[citation needed] The time alignment of an amplified music signal and its distortion components has a profound effect on perceived sound quality.

Nakamichi Harmonic Time Alignment (HTA) amplifiers adopt a wideband, low open loop gain design.

The sonic benefits of this design include powerful, high-resolution bass, a natural, richly detailed midrange, and smooth, clear highs.

[citation needed] Nakamichi's reputation for being the pioneer of audio cassettes no longer carried weight in the era of CDs.

Further adding to its demise was a shrinking distribution channel as high-end audio boutiques were forced to close as they could not compete in a rapidly changing environment where shoppers gravitated towards electronic superstores.

Bob Carter, General Manager for Lexus, also cited a lack of "resonance" with intended consumers as reasons for the switch.

[6] In Nakamichi's defense, many high-end audio manufacturers were also forced to merge or sell to larger holding companies during this time period partially influenced by the collapse of the Japanese "bubble economy"; such well-known companies include McIntosh and Mark Levinson.

[citation needed] The company emerged from bankruptcy and repositioned itself as a manufacturer of high-end "lifestyle systems" in the same manner as Bang & Olufsen.

In 2018, Nakamichi added 4 more models into its Shockwave lineup, incorporating dual subwoofers, quad modular surround speaker technology and DTS:X compatibility.

The Spatial engine amplifies high frequencies from the input audio signal and engages the high-frequency tweeters on the soundbar and rear/surround speakers to enlarge the spaciousness of the sound.

Nakamichi's shockwave Ultra 9.2 SSE Soundbar System was named a CES 2019 Innovation Awards Honoree.

[citation needed] In addition, it won a blind listening contest against the market's flagship Dolby Atmos soundbars that was voted by the public and hosted by Brian Tong, an ex-CNET tech editor.

The products featured innovative designs and addressed issues of mechanical isolation, as well as presenting a unique appearance.