By Karen Jacobs

The company said the move was part of its succession plan. But its shares fell 2 percent as some analysts noted that Dunn, who became president in 2006, takes over from a widely respected CEO just as a deepening recession tests sales.

"Like any transition there's just question marks about what his leadership going to look like," said Brad Thomas, an analyst at KeyBanc Capital Markets. "The big challenge right now is running Best Buy in the consumer environment that we're in."

Anderson, 59, will retire as CEO on June 24, but will complete his term as vice chairman, Best Buy said. Dunn, 48, will also be appointed to the board of the company.

Anderson, a more-than-30-year veteran at Best Buy, has been CEO for seven years and was only the second person to take on the top job after company founder Richard Schulze.

Under his leadership, Best Buy launched a program to focus more intently on consumer needs and moved into international markets. Best Buy, for example, announced a joint venture with Britain's Carphone Warehouse last year to expand into Europe.

Anderson "has been a visionary, shepherded the rise of Best Buy as the industry leader and the demise of (its) biggest competitor," J.P. Morgan analyst Christopher Horvers said in a research note.

Best Buy's smaller, bankrupt rival Circuit City Stores Inc said last week it would liquidate its assets and close hundreds of U.S. stores after failing to find a buyer.

Horvers said the company's customer centricity program has helped Best Buy stand out as discounters such as Wal-Mart Stores and warehouse clubs expand into electronics.

Analysts also expect Circuit City's failure will benefit Best Buy's market share over the longer term and allow it to gain more clout with suppliers.

RIGHT TIME FOR CHANGE?

Joseph Feldman, an analyst at Telsey Advisory Group, said it made sense to bring in a new CEO as the company hits a transition point in its strategy.

"The TV cycle is starting to wane a little bit," Feldman said, referring to slowing demand for flat-panel televisions. "They're heading toward Europe with more vigor, especially with the Carphone deal. So I think they want that new energy."

Dunn started working at Best Buy in 1985 and worked his way up to store manager and district manager before becoming president of North American retail in 2004.

The U.S. stores, Geek Squad technical service, and company marketing, customer experience and merchant functions report to him.

"The next phase for Best Buy will play to some of Brian's strengths in terms of what is (the company's) role going to look like in the U.S. now that Circuit City is going away," said Thomas, the KeyBanc analyst.

"One of the key factors in that is going to be relationships with vendors, and that's an area that Brian has been instrumental in."

The company said it has not decided about filling Dunn's position when he assumes the CEO role.

Best Buy shares fell 54 cents to $26.69 after trading as low as $26.31 earlier in the session.

(Additional reporting by Aarthi Sivaraman and Nicole Maestri in New York; Editing by Dave Zimmerman and Brian Moss)