High Tech Recall History: What Dell Learned From Intel

Thu Aug 17, 2006 10:47AM EDT

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Hard to believe that it was more than 20 years ago, but Michael Dell was still just a kid when the computer industry saw its first jaw dropping recall. As Wikipedia tells it, in 1994 Professor Thomas Nicely, then at Lynchburg College, reported a bug in the Pentium floating point unit. His original memo to Intel reported that certain division operations returned a value which was wrong by a very small amount. This result was quickly verified by other people around the Internet and became known as the Pentium FDIV bug.

The Internet (a much smaller, but no less contentious place) buzzed with angry folks corroborating Nicely's findings. Intel was caught by surprise with no guidebook or disaster communications plan. The company's first reaction? Deny the problem existed.

Later, as the fervor increased, Intel announced a recall and extended an offer to replace all flawed Pentium processors. It could have been a very expensive recall, but the reality was that very few people took Intel up on the offer. The kick-off of the recall came from Andy Grove, then president of Intel, who sent one of the greatestmea culpas of all time. In his sincere apologies came redemption and a rise in Intel's stock price. Ultimately Intel gained a huge thumbs up for the public admission of error, even though it was determined that most users would never be affected by this bug.

Dell's laptop battery problems echo Intel's chip problems. Both made enormous noise on the web and would in fact probably not affect all that many people. Dell's faulty battery stands the chance of costing the companies a great deal of money.