Dell has announced that its founder, Michael Dell, will return to the CEO position he vacated in 2004. The move comes after several quarters of declining market share and relatively disappointing earnings. Michael Dell replaces Kevin Rollins, who took over as CEO when the company's founder gave up day-to-day operations to become Chairman. Rollins also resigned his seat on the company's board of directors.
"Kevin has been a great business partner and friend," Michael Dell said in a statement. "He has made significant contributions to our business over the past 10 years. I wish him much success in the future."
In addition to announcing the departure of Rollins, the company also said that its fourth quarter earnings would fall below analyst estimates of 32¢ per share on income of $15.3 billion.
Challenging times
Under Rollins' leadership, the company began its market share slide, which has resulted in its rival HP opening up a market share lead over the past two quarters. In April 2006, Dell's growth rate fell behind that of the market for the first time. For the last quarter of 2006, Dell's worldwide market share shrunk by 8.7 percent from the previous year, and its 3.5 percent growth paled in comparison to overall market growth of 9.5 percent.
Slow growth isn't Dell's only challenge. The company was forced to recall over 4 million notebook batteries due to reports of explosions and fires. Since that time, other laptop makers like Apple, Toshiba, and Hitachi have also been forced to recall the Sony-made batteries. Even though the batteries were manufactured by Sonywho is also picking up the tabthe image in the minds of many consumers is of exploding Dell laptops rather than exploding Sony batteries.
