In 1974, an initiative was taken within the Philips Corporation in Eindhoven, the Netherlands. A seven-person project group was formed to develop an optical audio disc with a diameter of 20 cm with a sound quality superior to that of the large and vulnerable vinyl record. It wasn't until 1977 that the directors of the group decided to establish a laboratory with the mission of creating a small optical digital audio disc and a small player. They chose the term "compact disc" in line with another Philips product, the compact cassette. Rather than the original 20 cm size, the diameter of this compact disc was set at 11.5 cm, the diagonal measurement of a compact cassette.
Thirty years later, on March 6, 2009, Philips received an IEEE Milestone award with the following citation: "On 8 March 1979, N.V. Philips' Gloeilampenfabrieken demonstrated for the international press a Compact Disc Audio Player. The demonstration showed that it is possible by using digital optical recording and playback to reproduce audio signals with superb stereo quality. This research at Philips established the technical standard for digital optical recording systems."
Sony executive Norio Ohga, who later became the CEO and chairman of Sony, was convinced of the format's commercial potential and pushed further development despite widespread skepticism.