As Apple and Samsung dominate, Japan’s tech giants are in a free fall

Japan’s tech companies know their survival is at stake, and recent years have seen them take steps — including layoffs and, in Sony’s case, appointing Western executive Howard Stringer to run the company — previously unheard of in Tokyo’s hidebound corporate world.

But a more drastic step is only beginning to take shape: Though these companies have always been sprawling, producing everything from microwaves to cameras, they are now backing away from the very consumer electronics products that made them famous.

Sony and Panasonic have drastically cut their TV production. Sony’s life insurance arm was by far its most profitable segment last year, when it lost $5.9 billion because of flagging demand for electronics. Both Panasonic and Sharp are now selling solar panels. And Sharp is taking it a step further, laying out a plan in its 2012 annual report to “create ‘new essential products’ that people realize they always wanted” through a “shift in categories.” This means developing medical diagnostic imaging monitors, 3-D high-definition digital mirrors and electronic textbooks.