...the company has long pursued a pendulum-like strategy with software, alternately pushing responsibility to individual product groups, and then attempting to centralise control. Schaaff's appointment is in part a move back toward centralisation.
In some cases the approach has worked well. Software shipped with Sony Vaio computers, such as DVD viewing and creation tools, has generally been regarded as successful. The core PlayStation and PSP software, developed by the PlayStation group, has been well-received by gamers.
But Sony's near-three-year efforts to create an iTunes rival called Connect highlight the company's weaknesses, and provide a case study in what it must overcome to succeed.
That product's repeated failings have contributed to the Walkman brand's tumble to sixth place in the US portable digital audio market, with just 2 percent market share over the full year 2005, according to NPD Group. Even in Japan, Sony's digital audio products hold just 16 percent of the market, compared with the iPod's 51 percent, according to a recent BusinessWeek report.
Connect was conceived in mid-2003 as a competitor to iTunes, it was meant to help digital devices manage music and be a gateway to a service selling music — and ultimately games, movies and more — online.
By that time, Apple had clearly jumped ahead of Sony, setting consumer expectations for devices and software features. This left Sony in an unfamiliar position, with engineers and executives on both sides of the Pacific arguing about how much to rely on Sony's own innovations, and how much to adopt the feature sets of Apple and other digital music leaders.
For the most part, the Sony way won out. The software was built on the company's old MiniDisc management software, called SonicStage. Music would be sold in Sony's proprietary audio format, with its own copy-restriction tools.
One former insider recalled that Sony executives in Japan even resisted using playlists — one of the most common ways of organising listening — because that was "an iTunes paradigm", not something developed by Sony.
The resulting product, released in mid-2004, was a flop. A year later, in early 2005, Sony's US chief technology officer, Phil Wiser, conceded that the software had been a problem but said the company had learned from both its own mistakes and iTunes' gains.
"The software has gotten killed," Wiser told ZDNet UK sister site CNET News.com in a February 2005 interview. "We were well aware of the changes in the market, and clear on how we could address these things, but we didn't move fast enough."
Fast enough may still be a problem.
Two years later, the Connect software has yet to get a significant upgrade in the US. The European release of the new Connect Player software package, bundled with the promising new Walkman, was so flawed that Sony Europe recommended some customers use the older software instead.
Window for change is closing
Sony isn't alone in these issues. Consumer electronics companies have risen and fallen in the past because their products have or haven't been simple and easy to use. In today's software-driven world, that means the tightest possible integration between software and hardware is necessary.
Apple has shown how that model can work market wonders. Most others, on both the hardware and software side of the spectrum, have struggled.
Microsoft, with a software background, is having trouble with its consumer electronics ambitions. Its successful Xbox division was a first step toward the integrated Apple model, and the company has several new hardware projects, such as Origami, planned or rumoured to be under discussion.
In theory, Sony should also be able to pursue similarly tight integration between its own hardware and software. But analysts say it will require a concerted, companywide effort, which could be difficult to maintain.
"It's not like they don't have decent software coders," said GartnerG2 analyst Mike McGuire. "They've got good ones. It's about getting them in line, and getting them to focus."
That focus is essential. Analysts predict that even mainstream devices such as DVD players and home entertainment centres will soon tap into home networks, allowing music and video to be streamed around a house, for example.
Sony has the resources to respond to these challenges, analysts say. It retains a vast pool of talent, and valuable technologies such as the PlayStation 3 and the Blu-ray disc patents.
It's also shown a new openness in recent years to outside ideas, insiders say. Most notably, former QuickTime engineer Peter Hoddie, now head of media player company Kinoma, has spent weeks shuttling back and forth between Japan working with Sony on issues such as interface design.
Hoddie did not return calls for comment on his role at Sony.
"It's not too late for any consumer electronics company to get its software house in order," said IDC analyst Susan Kevorkian. "But it will require investments and a change of focus that can be challenging for a large company in a relatively short time frame."
