Nakamichi's fame in music reproduction stems from their excellent
cassette decks. The reason they worked so well was because they addressed tape's inherent physical shortcomings. Before making their own decks, they made
OEM decks and parts for many
high-end audio brands.
In 1957, they developed the first magnetic heads that were capable of recording and reproducing music within the audible frequency range from 20 Hz to 20,000 Hz.
In 1972, they created their own brand and unveiled the Nakamichi 1000, a world-class product that is famous in audio circles. In good condition, it is worth more than when it was made. Several units were made with gold-plated faceplates and hardware, and were often exhibited in high-end audio stores as art. (There was a gold 1000 in a big glass case for years in the entry to the Rhein-Main Audio Club, for example.)
In the 80's, they took everything they knew about tape and made the Dragon. The Nakamichi Dragon is considered the finest analog cassette deck ever made. Every once in a while one pops up on ebay, and it usually goes for about $1,000. (You can't even find a 1000, btw.) It represents the pinnacle of cost-is-no-object cassette science. A follow-up model, called the CR-7E, further refined the Dragon's art in a more cost-effective design, and is considered the best representation of Nakamichi's technology.
To address tape alignment, The CR-7E offered heads that could adjust their tracking azimuth by up to 2/3rds of a degree to ensure that the magnetic gap in the recording and playback heads were at an exact 90-degree angle to the magnetic track. To address tape speed variations, it had motors in both reel hubs, and capstans and pinch rollers to hold, guide, and control the tape both fore and aft of the record heads. To address tape/head contact, it had a pressure sensor to measure tape tension, and adjusted it accordingly. One could either set up the various parameters manually, or the deck could do it itself. All one had to do was place a blank tape in the machine, press the "auto calibration" button, and in 15 seconds, the deck adusted itself to obtain the maximum performance from the tape. (You could play the tape back on other machines, but for best results, you needed to play the tape back on the deck that it was calibrated for.)
Another notable deck from Nakamichi was the RX-505. Introduced towards the end of cassette's hegemony, it was a 3-head auto-reverse deck that manually flipped the tape to avoid aligment problems caused by reversing the tape direction with the drive mechanism. By flipping the tape itself, it reduced the need for the redundant motor systems used by the Dragon, and therefore was a less exspensive (it only sells for about $6-800 on ebay) than its fancier big brother.
The company still makes excellent hifi equipment, but with the fall of the cassette, its luster has faded in the audio community. It currently specializes in B&O-style art/audio sound systems that look and sound beautiful.
For more info, visit http://www.nakamichi.com