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Dell Inc., the world’s largest maker of personal computers, announced Wednesday that it has entered into a definitive agreement to acquire Alienware, a maker of gaming systems. The move will help Dell to address the lucrative market of gaming computers better, which may have impact on Dell’s profit margins.

Dell said Alienware will operate as a wholly owned subsidiary following completion of the transaction and will maintain its own product development, product marketing, sales, technical support and other operations as well as brand. The management and founders of Alienware will continue to operate the company as a standalone unit of Dell.

“Alienware’s products are an excellent complement to Dell’s own line of high-performance computers designed for gaming, enthusiast and media content customers. In addition to offering high-quality, high-performance products, Alienware has tremendous brand appeal with consumers and creative business professionals,” said Michael Dell, chairman of Dell Inc.

Even though Dell has been offering its gaming personal computers (PCs) for quite a while now, given that they all were based on processors from Intel Corp., which have not won gaming benchmarks for years now, the demand towards such PCs could not be as high as expected. Since Alienware offers both AMD- and Intel-based systems, it may have much higher success in providing gamers what they need. Additionally, Alienware will be able to get computer components from Dell now, which means better costs.

“Alienware has a legacy of success designing the highest-performance PCs using bleeding -edge technologies and innovative industrial design. We believe that Alienware will realize significant advantages from Dell’s world-class supply chain and operational efficiencies. They will allow us to continue to satisfy our core customers with the most innovative and highest-performing PCs, and ultimately extend the reach and appeal of the Alienware brand,” said Nelson Gonzalez, chief executive of Alienware.

Terms of the planned purchase will not be disclosed.

Discussion

Comments currently: 10
Discussion started: 03/23/06 07:20:05 AM
Latest comment: 03/27/06 12:26:59 PM
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1. 
I wonder what there is about this site that attracts the drama queens.

If this causes severe inner pain, you need to get a life. It's probably not going to change much anyway, except it will give Dell a way to sell AMD based machines without impacting their logistics and increasing their support costs. I mentioned a while back how selling AMD would be very expensive for Dell; the component costs aren't the issue, the support, development, educational, etc... costs are. This makes it simple, Dell doesn't support AMD stuff, doesn't have to reeducate their sales staff, doesn't have to worry about another line in their manufacturing, and they are not shut out of selling AMD machines. It's really the best of both worlds for them to run this as an independent company. They will no doubt improve efficiency and use their skills to run the company better and attempt to grow it and it could be potential lucrative for them.

I wouldn't have predicted it, but now that it happened it makes a lot of sense. I would be very surprised if Dell dropped AMD processors from this company's products, as is being speculated on the web a lot, because that would make the purchase pretty much pointless. Dell doesn't buy market share, and they certainly don't need technology from this insignificant company. It has to be all about selling AMD, without all the disadvantages of including them in the actual Dell line.
0 0 [Posted by:  | Date: 03/24/06 07:20:04 AM]
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I was joking, but seeing your response makes me wish I had bought an Alienware PC to feel outraged.
0 0 [Posted by:  | Date: 03/24/06 10:26:34 AM]
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I still don't get it, why would you feel outraged even if you bought an Alienware machine? Why would you perceive this as a negative event? You know that with Dell owning the company, it's not going out of business,and will probably benefit in many ways from it, not the least of which is cost.

Why would this bother anyone? What am I missing? I ask that because if I bought an Alienware machine and Dell bought the company, I'd be pretty happy about it. I don't see why anyone would feel this is disadvantageous to them, from the perspective of an alienware customer. From the perspective of Intel, they may find it not so pleasing though.
0 0 [Posted by:  | Date: 03/24/06 04:07:57 PM]
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It's not "outraging". However, it was a shock. I never thought it will happen, and I certainly didn't think that DELL would buy the almighty ALIENWARE. It's like saying Microsoft bought Google. How would you "feel" about it?
0 0 [Posted by:  | Date: 03/26/06 10:57:35 AM]
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