Sony's salvation may be following Samsung's lead

Fierce rivals, Samsung Electronics and Sony Corp also face many of the same problems: overstretched businesses, a dearth of game-changing products, hierarchical corporate structures and proud places in their national psyches. But South Korea's Samsung is proving how nimble a huge legacy name can be. Sony should pay attention.

Samsung headquarters has responded quickly to last quarter's 49 per cent plunge in net income. Admitting that the slump in its once-thriving smartphone business probably is not temporary, the company recently transferred about 500 employees from mobile phones to internet-related initiatives that hold more promise.

The firm has been shifting resources towards batteries, biopharmaceuticals, the next generation of memory chips, organic light-emitting diode displays and medical equipment. Earlier this month, it announced a tie-up with US biotechnology company Thermo Fisher Scientific.

And Sony? Well, the company appears to be staring at its feet hoping that a weaker yen will bolster profits. When chief executive Kazuo Hirai admitted to investors that his company had been slow in adapting to change, his very presentation reinforced the point: in the age of rampant piracy, movie and video-game download apps and changing consumer tastes, Hirai said the company would focus its efforts on its entertainment division.

That is the unit that New York hedge fund star Daniel Loeb called a dog before selling out of Sony this year.

Samsung's moves have hardly solved all its problems, of course. Its devices are being squeezed from below by cheap Chinese manufacturers like Xiaomi and from above by a rejuvenated Apple (which is now worth nearly four times as much as Samsung).