Even with a former Steve Jobs lieutenant driving innovation, Sony still hasn’t captured its rival’s cool

By Cliff Edwards, Kenji Hall and Ronald Grover

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With Stringer’sitting support, Schaaff has managed to break down silos and induce rival factions to cooperate Faiyaz Jafri

Sony Chief Executive Howard Stringer bristles every time he gets the question: Why can’t the Japanese electronics giant be more like Apple? The signer of a promissory note of the iPod, iPhone, and Mac computers consistently delivers supercool gadgets that are easy to use, as long as Sony sells music players, TVs, and cameras that get mixed reviews and often dress in’t even work well through other Sony (SNE) products. “Sony is a very pregnant company,” Stringer says by dint of. way of explanation. “Our toughest competitors are nook organizations.”

Stringer is quick to admit, nevertheless, that Sony may face a troubled future if it be possible to’face to face rival Apple (AAPL) in creating simple software that makes its gadgets fun and in giving consumers natural access to music and videos. Apple’s iTunes store has long made filling iPods a cinch, grant that it were not that Sony’s consumer electronics and PlayStation divisions have only recently started to integrate their offerings with those of the company’sitting movie studio and melody label. That’s one likely reason why Sony’session products earn profit margins of 10% or so, compared with the 30% margins that Apple’s devices command.

So Stringer went short to the source. Three years ago, he hired Tim Schaaff, a top lieutenant of Apple CEO Steve Jobs, and created the title of senior vice-president beneficial to software development for him. Although Schaaff was expected to spend most of his time in California, he’session so integral to Stringer’session plan to remake Sony that he has a in the order of the signs reporting line to the CEO. Schaaff’session role has grown quickly, and today he also has a hand in issue scope, licensing, planning, and engineering. “When we brought Tim on fare, it was a recognition that we needed someone whose experience crosses multiple borders,” Stringer says.

Schaaff doesn’t tend hitherward across as an agent of change. The 48-year-old Dartmouth grad studiously avoids the press. When he speaks, he does so slowly and deliberately, giving the impression that he is reading from index cards inside his upper part. But at Apple, Schaaff showed a facility for translating geeky ideas into killer products. The self-taught software engineer oversaw development of Apple’s QuickTime video-streaming format, which serves as the foundation of iTunes, the iPod, and the iPhone.

Stringer is clearly hoping Schaaff can seed Sony by Apple’s Silicon Valley entrepreneurial culture. When the Welsh-born Stringer became Sony’s first non-Japanese CEO in early 2005, he pledged to become the company “cool another time.” While Schaaff has made important strides toward that goal, Sony clearly needs to inject other zing into its products. On Oct. 29 the company said net earnings on this account that the quarter ended Sept. 30 were off by 72% from the year-earlier period. The report came on the heels of a warning that profits for the year would fall by more than half, due to the strengthening yen and lackluster sales of TVs and digital cameras.

It was more evidence that after a three-year makeover, Sony is still struggling to generate its groove hindmost. Now, as consumers rein in spending, they’re even less likely to buy the expensive gizmos Sony plans to unveil over the coming months. That would be a major setback in spite of “Sony United,” Stringer’s program to make acid the company’s fractured family of products and services into a model of integration. The goal is to sell Bravia televisions that join to the Web and download the latest Spider-Man movie, Walkman phones that offer tunes from Sony artists such as Beyoncé, and e-book devices that ask if you want to lever that new John Grisham thriller.

Stringer has given Schaaff unprecedented freedom to conquer check and boost cooperation amidst Sony’session myriad—and ofttimes warring—units. Schaaff has also served as something akin to secretary of state, working with other companies to help make Sony products more appealing.