Dell Founder Preaches Calm in Face of Challenges - 20 Aug 2006

At a meeting in Hong Kong, Dell founder and Chairman Michael Dell downplayed recent problems that have plagued his company--the largest PC maker in the world--and preached a message of calm. He said that Dell's ills--which include a massive notebook battery recall, dramatically reduced profits, surging competition with HP, and a US Securities and Exchange Commission (SEC) investigation into the company's revenue recognition practices--were all just temporary setbacks.

"There are a number of things a company might do in this situation," he said during the meeting, which was hosted by the chamber of commerce in Hong Kong. "[One might] run and hide, wait for the regulators, or claim it's not a problem. We've exercised an abundance of caution. Beyond all the hysteria, we're doing the right thing for our customers, and they'll appreciate it in the long run."

Dell appeared at ease during the meeting and wryly noted that although others might focus on the past 24 hours, he prefers to "look at the last 24 years," during which Dell turned his college dorm room business into an international powerhouse. (Dell Inc. was actually founded 22 years ago, however.) "The fact is, no one sells more computer systems than we do," he added. "Come and see us in a couple of quarters."

Certainly, the recently resurgent HP--considered a lost cause in the wake of Carly Fiorina's mismanagement--is an example of how a giant technology company can bounce back after a rough financial period. And Dell never descended into the massive and widespread problems that plagued HP, so its current downturn could be even shorter and less painful.