Gateway President and Chief Executive Officer Wayne Inouye has resigned to "pursue other interests," according to a Gateway statement issued Thursday.
Richard Snyder, Gateway's chairman of the board and former president and chief operating officer, will temporarily serve as CEO while the company searches for a permanent replacement. Gateway expects to complete its executive search by the end of the third quarter, according to the statement.
Inouye's short stint at Gateway started in March of 2004, when Gateway acquired computer-maker eMachines Inc., where Inouye had been CEO since 2001.
One of Inouye's first moves after taking the helm was to shut down Gateway's nearly 200 U.S. retail stores that were draining money from the company. He then led Gateway to reach retail agreements with top retailers including Best Buy Co. Inc., Circuit City Stores Inc., Staples Inc. and CompUSA Inc.
During his tenure, Inouye steered Gateway to several profitable quarters, although the company's latest earnings reported last week missed analyst expectations.
Last week, Gateway -- a distant third in the U.S. PC market behind Dell and Hewlett-Packard -- reported that its fourth-quarter net income dropped to $22.4 million from $93.9 million from the same year-ago period. Revenue was up to $1.12 billion from $1.03 billion from the same year-ago period, but was below analyst expectations of around $1.2 billion.
Some analysts speculated whether Inouye's departure would hurt Gateway's key partnership with Best Buy.
"Gateway is heavily weighted toward placements at BestBuy, and Wayne Inouye was the guy who made that really tick," said Sam Bhavnani, principal analyst, mobile electronics and computing, for Current Analysis, in San Diego. In the late 90s, Inouye served as senior vice president of computer merchandising for Best Buy.
Gateway now faces the challenge of finding a leader who can maintain Inouye's momentum in the retail market and broaden Gateway's reach into other areas of opportunity, such as the commercial and international markets, said David Daoud, research manager for personal computing at market research firm IDC, in Framingham, Massachusetts.
Daoud expects the first half of 2006 to be a challenging, transitional period for Gateway, as the company enters the seasonally slow time in the U.S. retail market and embarks on its search for a new CEO.