Sony Gets Apple's Magic

Sony Chief Executive Howard Stringer tightens every time he gets the question: Why can't the Japanese electronics giant be more like Apple,the maker of the iPod, iPhone, and Mac computers which delivers cool gadgets that are user friendly, while Sony sells music players, TVs, and cameras that get mixed reviews and often don't even work well with other Sony products.

"Sony is a very big company," Stringer says, "Our toughest competitors are niche organizations."

Stringer is quick to admit, though, that Sony will have a troubled future if it can't compete with Apple in creating simple software that makes its gadgets fun and in giving consumers easy access to music and videos.

Apple's iTunes store has made filling iPods a breeze, but Sony's consumer electronics and PlayStation divisions have only recently started to integrate their offerings with those of the company's movie studio and music label. That's one likely reason why Sony's products earn profit margins of 10% or so, compared with the 30% margins that Apple's devices have.

Hiring the rival

So Stringer went straight to the source. Three years ago, he hired Apple
CEO Steve Job's top lieutenant, Tim Schaaff and created the title of senior vice-president for software development for him.

Although Schaaff was expected to spend most of his time in California, he's so integral to Stringer's plan to remake Sony that he has a direct reporting line to the CEO. Schaaff's role has grown quickly, and today he also has a hand in product design, licensing, planning, and engineering.

"When we brought Tim on board, it was a recognition that we needed someone whose experience crosses multiple borders," Stringer says.