Dell snaps up Alienware

Dell Inc. has agreed to purchase high-performance PC vendor Alienware Corp., the two companies announced Wednesday.

The acquisition will "compliment Dell's own line of high-performance computers," while giving the Alienware products the benefits of Dell's "supply chain and operational efficiencies," the companies said in a statement.

The purchase, which was rumored for weeks, is expected to clear regulatory requirements in 30 to 60 days. Ultimately, the acquisition will shorten the time it takes for customers to get their hands on Alienware's sleek gaming workstations and laptops.

It can take from four to six weeks for customers to take possession of some of Alienware's products, said Mark Vena, an Alienware spokesman. For Dell that lead time is generally less than 10 days, he said. "They're absolutely world-class in that area."

Dell already sells high-end workstations under its XPS brand, but with the Alienware acquisition it gets something that the Round Rock, Texas-based company would have had a hard time creating on its own: gamer cachet.

"Dell will always be thought of as a good business-and-consumer company," said Tim Bajarin, president of the Creative Strategies Inc. analyst firm. "A Dell logo will still not play in the same way Alienware would."

Bajarin said it was unclear whether or not the company might discontinue its XPS systems, following the acquisition. "It's hard to tell," he said. "There are some segments that would still buy Dell because of the service and support image, and who really don't care about the gamer image," he said.

The Miami-based Alienware will continue to operate as a wholly owned subsidiary of the PC maker, and will continue to develop, market, sell and support the Alienware products.

One interesting side-effect of this structure is that it will give microprocessor vendor Advanced Micro Devices Inc. (AMD) a foothold in Dell, which has to date resisted selling systems based on AMD's chips. A number of Alienware's PCs, including its Aurora and ALX series systems, are built with AMD processors.

Industry observers have speculated that Dell's tight relationship with AMD rival Intel Corp. has kept the PC maker from selling AMD's chips. But according to a Dell spokesman, Alienware will be free to continue to sell whichever processors it chooses. "That's the kind of decision that they make on their own," he said.

Founded in 1996 by Nelson Gonzalez and Alex Aguila, Alienware is best known for its high-performance gaming PCs and stylish laptops. The privately held company sells systems in United States, Europe, Australia and New Zealand.

Alienware employs a staff of about 700, none of whom are expected to be laid off as a result of the acquisition, the companies said.

Terms of the acquisition were not disclosed.

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Robert McMillan

IDG News Service
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