Technology giants vie for jackpot winner at Vegas gadget party Indeed, the three companies make fascinating case studies. All makers of key components for Apple's globally successful products, none has managed to turn that relationship into major profits, even as Apple tries to move away from buying parts from Korean rival, Samsung. Perhaps more surprising, the new high definition televisions with 3D and internet connectivity that are selling well globally have produced fresh pressures on profits rather than economies of scale. Technology may be shaping all our lives, but only Samsung and Apple are shaking out enormous fortunes. This year at CES the focus was on an ever-growing number of connected devices, from forks to phones and from fitness trackers to cameras. It was also all about the next generation of televisions - ultra high definition. It looks stunning, but only if upgrade-weary consumers pay more for their TVs will it turn around any of these struggling businesses. But while Sharp has been crippled by falling prices in an increasingly commoditised TV business, both Sony and Panasonic are in the midst of reorganising their sprawling conglomerate companies into coherent structures. Kazuhiro Tsuga, president and chief executive of Panasonic since June, is organising 88 businesses in four companies containing 50 business units. He has said that any that do not achieve a 5pc operating margin will be for the chop; the business shrank by 36,000 people last year, and will lose another 10,000 this year. One strand that has already gone is the mobile phone that was aimed at Europe. Launched with some fanfare, it flopped quickly. "We have decided to quit from the European mobile market," Tsuga said, saying that Panasonic had hoped to export its Japanese expertise to the Western mobile market. "We had thought the whole world would become the same but Japan is like [the] Galapagos," he said, meaning that its tastes are peculiar to itself. We had to develop two types of product and that was too much for us. Likewise, in the consumer space at least, Tsuga says Panasonic will continue to work with Sony to make an implausibly thin, 56" TV using new organic light emitting diode (OLED) technology. Innovative manufacturing techniques mean that this format, with its improved efficiency, colours and contrast, is now finally on the road to some sort of commercial future in 2014-15. But to get there Panasonic has had to embrace Sony, still its arch-rival in many other areas. Tsuga does not make it sound as though he thinks the relationship is a permanent one, however, and each manufacturer's version of the same device is markedly different because of the additional technology required to turn a display panel into a television. "Any possibility could exist," says Tsuga of the relationship with his competitor. At this moment we are working with Sony. Does that mean a newfound kinship between the Japanese giants as they struggle against Korean innovators, Apple's dominance and Chinese upstarts who can make cheaper versions of existing successes? Tsuga claims that history is at least on the side of the innovators. "We will see more change in the TV industry in the next five years than we saw in the previous 25," he told CES's opening keynote session. As a former engineer he knows, better than most, Moore's Law - that processing power for computers doubles every two years. That in part is why Panasonic is trying to bring together some of its varying areas of expertise - such as televisions that now include cameras that recognise peoples faces in order to present them with personalised programme recommendations. Once-separate businesses now complement each other and even feature in the same products. But nonetheless, Panasonic is still a vast company with 80,000 employees and 76 factories in China, for instance, as well as businesses as diverse as in-flight entertainment, where Panasonic owns more than half the market, avionics and even a second-division football team. Rather than a consumer electronics company, Tsuga describes Panasonic as "an eco-engineering company." He claims that the company needs to do more business in China, which will soon be the world's largest market. Indeed after Panasonic's most recent financial results, in which the company forecast losses of $5.9bn (£3.7bn) for 2013, it was the first place he went. "After I finished our financial results it was bad," he jokes. I needed to escape Japan. "If we could be more inside China, we could survive [in China] and we have got potentials in all sorts of businesses," he claims. Only [exporting] from Japan doesn't work. We should think how we go, but I got a good feeling from China. In practice, that means a circumspect approach, however, and Tsuga claims there is a risk to entering markets in China that the government sees as of strategic importance: The risk of a China business depends on the area of the business. In strategic areas the government wants to have more [control], even by changing the law. We need to think what's profitable. So while Panasonic's welding business in China is likely to expand quite rapidly that might not be so for electric vehicles or hybrid batteries. But he adds: "If there must be a risk, we need to take that risk otherwise we can't become a real major player." Still, it is in Japan where Panasonic's heart clearly remains, even in a climate where Tsuga says "we can't fire anybody." Although he wishes for reforms to employment law, he accepts that "on the Japan side there is a lifetime employment. Our key thing is our employees, but that doesn't necessarily contradict shareholders," he said. As the transition continues - "from manufacturer to service provider" - Tsuga concedes that he must sometimes do things that might not always appear to make total strategic sense. "Without having a dream product we have to survive," he says. That's the first priority. TV is not a standalone product, it's an infrastructure-based product that we cannot do by ourselves. He points to white goods, however, as something that the business can use to make significant profits as the rest of the company is reshaped. Panasonic's future is being built on far more than a single product category and its contribution to people's lives is extending far beyond the living room. Japan still has lots of strengths but we have to compensate for the weaknesses with more strength and speed of decision making. Once a sedate place to work, Panasonic looks like becoming a rather more racy prospect for its 330,000 employees.