Nakamichi was founded in 1948 as Nakamichi Research Corporation Ltd (Nakamichi Kenkyujo Kabushiki Kaisha ) in Tokyo Japan. It specialised in manufacturing portable radios, tone arms, speakers, and communications equipment. Founded by Etsuro Nakamichi, it was later headed by his younger brother Niro. Etsuro's son Ted is the only remaining Nakamichi in the company today. 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. While their cassette decks were particularly well known, the company is also credited with numerous other audio innovations, such as self-centering record players, high-end DAT recorders, and ultra-compact slot-loading CD changers. Over the years, the company managed to garner an impressive level of brand loyalty.

In the 1950s, Nakamichi developed one of the first open reel tape recorders in Japan under the Magic Tone label. In 1957 it developed and made its own magnetic tape heads. With the advent of magnetic tape at the time, the company decided to work with the format. Subsequently it went onto develop and market its own tape recorder, and during that same year, launched the Fidela 3-head Open Reel Stereo Tape Deck.

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.

In 1973 Nakamichi created stereo cassette decks with such high quality that eventually made reel-to-reel tape recorders obsolete for consumers. The Nakamichi 1000 and 700 were regarded as two of the finest cassette recorders made in the mid-1970s. They had three heads, dual capstan drive that reduced wow and flutter to new low levels, and Dolby-B noise reduction to improve the signal to noise ratio. The feature that really set them apart was the adjustable record head azimuth and Dolby calibration that could be optimized for each cassette tape. Many audiophiles aspired to but could not afford a Nakamichi 1000 or 700 (whose model number was derived from the list price), so Nakamichi came out with more economical two-head models such as the Nakamichi 500 and the wedge-shaped 600.

Nakamichi pushed live recording with their Nakamichi 550, a portable cassette recorder that had three microphone inputs: one for left channel, one for right channel, and one for a center blend channel. This recorder could run from batteries or AC and was used to make very high quality recordings in the field. All of these products were known for top-notch engineering and sound quality.

In the late 1970s Nakamichi updated their machines with the Nakamichi 1000 II, the 700 II, and other midrange and low-end models. They branched out into other audio components such as amplifiers and eventually speakers, but these products were never as highly regarded by the audio community as their cassette decks.

In the early 1980s Nakamichi came out with further refinements in a successor top-of-the-line machine, the Nakamichi 1000ZXL. Prices pushed upward with this machine being $3,800 at the time. The updated 700ZXL was a mere $3,000. Low-end cassette decks sold new for under $200, with the Nakamichi name on them. This time period stands as the pinnacle for cassette recorders, as from that time onwards digital recording methods began to make inroads.

Nakamichi has never held its prominent position in audio technology since that time. Although the company dabbled with a 6 disc CD changer for use in computers in the late 1990s they failed to move quickly to the rapidly expanding computers market compared to other Japanese electronics companies such as Sony, Toshiba and Yamaha who introduced single disc CD ROM drives. The company tried to promote DAT and CDs (they launched the OMS-70 CD player in 1984) but their core engineering expertise remained with cassette based technologies. With the decline of analog taping, Nakamichi was unable to retain its appeal to the high end audio community.

By the end of 1990s Nakamichi was largely forgotten. It was acquired by the Grande Holdings, but was allowed to be run independently and with mostly the original management and design teams. Niro Nakamichi left in 1998 to set up Mechanical Research Corporation. The company went into bankruptcy protection on February 19, 2002.

The company emerged from bankruptcy and repositioned itself as a manufacturer of high-end "lifestyle" systems" a la Bang & Olufsen. They also manufacture a range of CD changers available for Hi-fi, computer, and car audio use.

As of June 2006, Nakamichi released its first portable DVD player with built-in LCD screen, the Lumos

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