Sell Sony, buy Samsung II

Could the contrast be greater? Sony announces layoffs of 10k workers, but no dramatic strategy changes. Meanwhile, Samsung announces $33B in future investments in chip plants. Samsung is on a trajectory to surpass Intel as the leader in chip revenues. Admittedly, Intel specializes in CPUs which have higher margins than Samsung's memory chips, but memory is going to be a huge market in the next decade -- think of all the applications, from the iPod Nano, to flash-based video recorders, phones, even laptops without hard drives.

See previous posts here and here.

Businessweek: And if Stringer & Co. needed a reminder that Sony must change fast, they got it five days later. On Sept. 27, Intel Corp. (INTC ) and Microsoft Corp. (MSFT ) threw their support behind a next-generation DVD format from Toshiba (TOSBF ) called HD DVD -- thus delivering a blow to Sony's Blu-ray technology, widely considered technologically superior. Addressing Sony's myriad challenges, Stringer told BusinessWeek: "It's urgent we rectify this situation."

As he looks for inspiration, Stringer might consider taking a page from Samsung Electronics Co. Yes, the two companies have vastly different portfolios, with Samsung earning most of its profits from chips and Sony owning music and movie studios. And it's true that Samsung remade itself only after a near-death experience, following the Asian financial crisis in the late '90s. Still, the Korean company has taken many of the steps that analysts believe Sony needs to take, ranging from collaborating more with partners to doing a better job taking its cues from the market. In doing so, it has become one of the nimblest players in the business. "When Samsung wants to get something done," says Intel Executive Vice-President Sean M. Maloney, "the decision comes down from the top, and everybody moves at lightning-quick speed to just do it."