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Dell buys Alienware to counter Apple?

updated 10:40 pm EST, Wed March 22, 2006

Dell scoops up Alienware

PC giant Dell today announced that it is buying Alienware, a high-end PC-maker focused on the gaming market -- in an effort to what some believe is to fight Apple's potential marketshare gains by its move to the Intel architecture. "Alienware's products are an excellent complement to Dell's own line of high-performance computers designed for gaming-enthusiast and media-content customers," CEO Michael Dell said. "In addition to offering high-quality, high-performance products, Alienware has tremendous brand appeal with consumers and creative business professionals," Dell added. Dell likely took interest in Alienware to strengthen its stance against Apple, as well as branding, according to a report from Forbes.

The Dell brand is well known for its mainstream, family PCs, while Alienware's high-end gaming machines have drawn a crowd of power gamers and users.

The notion of the Alienware buyout by Dell was first discussed by
Rahul Sood, CEO of Voodoo PC, an Alienware competitor. According to the report, Sood argued that Dell needed to buy Alienware, in part to position itself better against Apple, which has begun producing Intel-based Macs, a bold departure from its PowerPC-based roots.

"With the recent Intel/Apple relationship, it's clear that 15% (or whatever) of the consumer space for Dell may not be enough," wrote Sood. "Apple is likely to go to 8% with the help of Intel, over the next year or so. The PC-gaming market is threatening Dell's 'perceived technology leadership'--and ultimately the consumer space."

The report argues that Dell acquired Alienware so it could help establish a strong brand.

"The Dell brand has become synonymous with mainstream, family PCs, while Alienware's cutting-edge cool has a strong following among young gamers and power users," according to the report. "Alienware has also gained some traction in recent years by selling its powerful machines to businesses. And while that market is still small, the PCs are increasingly being used in graphics applications and to perform high-end engineering."




by MacNN Staff

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Comments

  1. Peter753

    Joined: Dec 1969

    0

    Still Cool?

    I smell really pissed off gaming dorks. "OMFGZ ALIENWAREZ IS WAY NOT LEETZ NOW THAT THEY ARE SOLD OUT TO TEH MANS"

  1. Senbei

    Joined: Dec 1969

    0

    ROFL!

    z0M6, W3 n33d 70 n0w f1nd 4 n3w 3|173 h4rdw4r3 v3nd0r 70 b3 c00| 4641n. 7h3 n3w D3|| 4|13nw4r3 5uck5 7h3 b16 0n3!

  1. jhorvatic

    Joined: Dec 1969

    0

    I don't see the connecti

    I don't see the connection with Apple and Alienware computers as being a threat to Dell. Apple is a threat to Dell all by itself as OSX gains and Windows gets older and older while Microsoft can't figure out how to get Vista out the door without hacking another feature. Right now Vista looks like a tree with no branches it's been hacked so badly as it is. I don't know why they are having so much trouble with it. It looks more like XP SP3 than a new operating system. I guess it has something to do with the 7 different versions there trying to sell all at once. Talk about confusing.

  1. gerbick

    Joined: Dec 1969

    0

    There's no connection...

    Apple has pretty much nothing that compares with Alienware... not the desktops which are for hardcore gamers, nor the laptops which have SLI in some of the higher versions.

    The attempt to draw a connection to the Dell purchase to "defeat" Apple somehow is hackneyed journalism at best.

    Dell has a share that Apple would kill to have... maybe that's the connection? Bleh.

  1. kw99

    Joined: Dec 1969

    0

    So Dell is selling

    alien-head-looking desktop PCs. I'm not exactly sure what difference it will make. It's still just a Windows PC with some unusual looking (not all that attractive in my book) plastics. Apple has more "stylish" products and, more importantly, Mac OS X. With Vista being forever delayed, that distinction is become even more important. If Mac OS X 10.5 Leopard beats Vista to the general (OEM) market, that distinction will become monumental and Apple WILL gain significant marketshare.

    So I do agree with the article on that one point. Dell should be worried.

  1. RevEvs

    Joined: Dec 1969

    0

    counter Apple? WTF

    Umm how does this counter Apple? Alienware make gaming machines. Apple dont do games/gaming machines - so uhhh theres no link in this story to Apple

  1. JulesLt

    Joined: Dec 1969

    0

    Read Sood's comments

    It's about market-share, not about competing directly with Apple. i.e. Apple are threatening Dell in the consumer space.

    One response is tackling Apple head-on with 'designer PCs' (a la Sony). The other is growing that market-share by tackling another area of the market - i.e. the gaming sector rather than the casual consumer.

    The gaming sector is also pretty profitable as these guys will pay as much as they can afford and then upgrade again and again - much better margins that cheapest you can afford.

    Alienware looks pretty cheesy if you like Mac design, but they have a great reputation. Maybe they're hoping for a bit of reverse cool (like Intel getting cool points from Apple)?

    What it actually says is that Dell's own line of high-end machines must have been a flop. That's not exactly startling - it's like McDonald's selling Kobe beef - you need to understand your customer, and your Kobe beef customer doesn't want to go to McDonald's - so buy out where he is going.

  1. chadpengar

    Joined: Dec 1969

    0

    kobe beef

    I might actually step into a McDonalds that had Kobe Beef :-)

  1. brainiac_7

    Joined: Dec 1969

    0

    Okay ...

    Most of the gamers I know are rabid cheapskate DIY-ers who look down on PCs for games. I'll stick w/ my Mac.

    At least I can smell some Wintel fear somewhere in this article. Makes my day.

  1. kerryb

    Joined: Dec 1969

    0

    Out of this world

    I see this as Dell expanding its line and just another corporate buyout. Dell will have a boutique line of in my opinion ugly hardware for people (teenage boys) that like that kind of thing. Dell is always a threat to Apple and vice versa. I don't see this as a direct product to product response but a general effort to improve the bottom line.

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