THE fate of Sony, the electronics and entertainment giant, will be revealed this week as Sir Howard Stringer, its chief executive, embarks on a “make or break” cost-cutting drive aimed at resurrecting Japan’s most iconic company.

The long-awaited unveiling of the group’s strategy, due on Thursday, is also likely to include bold visions of the future: Sony is expected to outline a “next generation” of digital devices and declare a full-scale technology war with Apple’s iPod, Microsoft’s Xbox 360 games console and Toshiba’s next generation of DVD players.

Sir Howard has made clear that his reform package would be aimed at restoring the core electronics business — still representing 65 per cent of the group, despite a dire three years of performance — to its former glory.

Observers predict a dramatic retreat from many underperforming product lines and a channelling of resources into any gadget or appliance that can exploit Sony’s powerful “cell” chip.

Yohei Kanazawa, an analyst with Nikko Citigroup, said: “We expect the company to narrow the focus of both its product line-up and its R&D (research and development) activities. It has already said it will close down its cathode ray tube (televison) facilities in the UK, but further restructuring is possible.”

Some observers believe that Thursday’s announcement will see the company definitively lose its “Japaneseness” as it ditches businesses such as robotics, for which it has long had emotional attachments.

Although the restructuring plan is expected to focus primarily on a huge reduction of group overheads, Sir Howard’s measures will probably not involve such big job cuts as previous restructuring schemes.

Instead, analysts say, the Welsh-born former studio mogul will concentrate on long-overdue corporate reform: shedding non-core assets and reducing the overall number of Sony operating companies from the current five to three.

Sony Communications, the group’s thriving internet and music download business, is viewed by investors as a prime candidate for being crammed with a variety of extraneous operations from around the group and then listed as an entirely separate company.

Sony Entertainment, the mainly United States-based music and film operation, is another possible candidate for a separate listing. First, however, it is expected to unravel some of the joint ventures that it has a stake in by buying out its various partners.

Sony Computer Entertainment — the division that controls the PlayStation console and hand-held games machines — is expected to stay close to the core of the group.

Fumio Osanai, an analyst with UBS, said: “We (also) anticipate the listing of the financial business, as well as Sony BMG in the medium term, and extensive efforts to reduce fixed costs. Thereafter, we expect management focus to turn to rebuilding the electronic devices business.”

While the focus of the announcement on Thursday will be the nuts-and-bolts of restructuring, no Sony meeting would be complete without some word on forthcoming products. The company will not have much more to say about the forthcoming PlayStation 3 console, which was the star attraction of the Tokyo Game Show last week, but will probably unveil the Christmas line-up for its network Walkman range of “iPod-killer” portable music machines.

Analysts believe that Sir Howard may discuss the group’s plans for “Location Free television” — a cutting-edge technology that would allow live internet streaming of television directly to mobile phones and other hand-held devices.