Japan Tech Industry Still Struggles After Quake, Looks to Mobile

Sony, Nintendo, Panasonic, Toshiba and Sharp mostly kept to their second quarter profit forecasts despite dealing with ongoing fallout from the Japan quake. But none are back in the black, suggesting they may still be grappling with some of the aftereffects as they attempt to revamp their business models and pull up revenues.

Once Japan's technological giant, Sony now finds itself bleeding money as South Korea-based Samsung continues to beat it in TV sales and Apple pulls ahead of it in the tablet market. Its profits fell by almost 60 percent, twice what analysts had predicted.

Panasonic's similarly poor performance in the TV sector dragged down profits this quarter, while Toshiba says earthquake-related plant damage slowed its chip production.

Of these companies, Nintendo alone came out even worse this quarter than the one before, due mostly to sluggish sales of its 3DS handheld game player.

While all but Nintendo remain somewhat stable, however, these companies' tough times are likely to continue unless they make big changes. Rather than focusing on flat-screen panels, which are big money drainers with high manufacturing costs and low profit margins, Japan's tech companies have started looking elsewhere to shore up profits.

Sony and Panasonic may need to reduce or even amputate their TV divisions in favor of developing more mobile devices, as market trends indicate the money is in tablets and smartphones right now.

"It's unthinkable Sony will start making money from TVs any time in the foreseeable future", Sony's CFO Masaru Kato admitted. "Sony should seriously consider whether to stay in that business".

Panasonic may have to move in that direction as well. In addition, it may be looking to offload some appliance production to China and instead focus on making environmentally friendly products to boost sales.

Nintendo plans to slash prices on its 3DS handheld device by 40 percent and focus on beating Apple in the mobile entertainment game. With portable iPhones and iPads now more popular than stationary consoles in terms of game sales, Sony finds itself struggling to draw consumers away from Apple's over 100,000 gaming apps.

The quake may have challenged the Japanese tech powers as a whole, clipping their agility and responsiveness in dealing with the rapidly changing market now forcing them to reevaluate business strategies. Unless they move in the mobile direction, Japan's tech giants may remain indefinitely in the red.