Sony agrees to a partial spin off of its entertainment division as proposed by investor, Dan Loeb. The company will have to discuss the details of the proposal with the board. Sony also plans to hire more financial advisers to help with the evaluation according to Nikkei news in Japan.

Sony's stocks rose yesterday which means investors are confident about the proposal involving a revamped Sony. Investor confidence is important to help Sony become the top consumer electronics giant since the Walkman days. However, it's still a question of whether or not Sony still has the ability to create innovative products that could change the world.

Pushing existing Sony products is no longer enough given the tough competition provided by TVs, PCs, tablets and smartphones. Even as Sony considers the Dan Loeb's spin off proposal, the company decided to cut expected sales of cameras and smartphones to a low 13-17%

Sony's entertainment division provides most of the company profits. The entertainment division includes movie studios, record labels and strangely insurance policies. A 20% spin-off of this division would unburden the struggling consumer electronics division. Sony can therefore focus and revive its electronic business.

Sony has combined the electronics and entertainment division which led competitors like Apple catch up to it during the rise of the iPod and iTunes. Sony's gadgets lacked the superior software it needs to take off in the market. Software has always been its weakness. The company cannot provide a seamless user experience to its consumers.

Sony CEO, Kazuo Hirai, reiterates that the company is at the early stages of proposal evaluation. Loeb must brace himself because he is dealing with a company that has a proven track record for resisting any kind of change. Even if the spin-off proposal is approved, it would take more than investments and reorganizations. The spin-off should be treated as Sony's rebirth. For the company to successfully stage a comeback, it would have to come out with a miracle gadget to change the world.