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Dell buying gaming PC maker Alienware
By DWIGHT SILVERMAN
Copyright 2006 Houston Chronicle
Austin-based computer giant Dell is acquiring boutique gaming PC maker Alienware for an undisclosed amount, executives at both companies said Wednesday.
Alienware of Miami will operate as a wholly owned subsidiary, independent of Dell in terms of marketing, product development, manufacturing and technical support.
In fact, Alienware Chief Executive Nelson Gonzalez said Dell's name won't appear anywhere on his company's Web site, through which most customers buy Alienware's high-end desktop and notebook PCs.
Likewise, a Dell spokesman said there would be no link to Alienware from Dell's site.
The acquisition of Miami-based Alienware by Dell has been rumored for several weeks, and was first speculated upon in a blog entry by Rahul Sood, the founder of Canada-based Voodoo PC, an Alienware competitor.
Gonzalez said Alienware will take advantage of Dell's greater efficiences, allowing it to buy computer parts at very low cost and assemble them quickly.
Mark Vena, a former Compaq and Dell executive who became Alienware's vice president of marketing in January, said the time between when an order is placed by an Alienware customer and the PC is built and delivered can be as much as 3-5 weeks.
"At Dell, it's closer to 3-5 days," Vena said.
Dell spokesman Jess Blackburn said his company will benefit by extending its market reach into a favored niche — PC enthusiasts and gamers.
"We certainly think Alienware has done a very good job of establishing their brand, and it's a brand that is recognized for quality in the enthusiast PC buyer category," Blackburn said.
Gonzalez said Dell will continue to sell its own line of gaming PCs, marketed under the Dimension XPS brand, and will not tap Alienware's design team.
"We will remain competitors," Gonzalez said.
In fact, Dell began taking orders Wednesday for its XPS 600, a gaming desktop that comes with four graphics cards, a custom paint job and a 30-inch LCD monitor. It will sell for almost $10,000.
The acquisition also will have Dell for the first time selling computers that use Advanced Micro Devices' Athlon processors, albeit at arms' length. Dell's PCs use Intel processors exclusively, though rumors have repeatedly circulated that Dell was considering using AMD's chips, which are beloved by gamers and PC enthusiasts.
Dell had $56 billion in sales in the last four quarters, with sales of $15.2 billion and profits of 43 cents a share in its most recent quarter.
Alienware, a privately held company, had sales last year of $173 million, Gonzalez said. Vena said that, if the company had remained private, it was on track to have sales this year "north of $200 million."
Dell seldom makes acquisitions. Prior to the Alienware deal, its highest-profile deal was the 1999 purchase of ConvergeNet Technologies, a data storage company, a for $340 million in stock.
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