Dell to buy high-end PC maker Alienware
By John Pain, The Associated Press
MIAMI — Dell, the world's largest computer maker, said Wednesday it would buy Alienware, whose high-end PCs are widely acclaimed by video gamers for their fast performance and sleek, UFO-themed looks.
The co-founders of Alienware, Alex Aguila, left, and Nelson Gonzalez.
By Wilfredo Lee, AP
Dell, based in Round Rock, Texas, didn't announce terms of the deal, which will help expand its offerings for the lucrative gaming and multimedia market. Dell said Alienware would operate as a wholly owned subsidiary and will keep its brand name and its own product development, marketing, sales, technical support and other operations.
Miami-based Alienware was founded in 1996 by Nelson Gonzalez and Alex Aguila, two childhood friends who have built a cult-like following for their PCs that cost an average of about $3,000 to $4,000. They will continue to run the company as a standalone unit of Dell, Dell said.
"This acquisition makes sense because the space that Alienware plays in is a high-growth segment of the PC business. It's also a high-margin segment," IDC analyst Richard Shim said.
One risk though is that hardcore gamers may think that Alienware has lost its street credibility by making a deal with a mainstream player like Dell, he said.
"It'll be interesting to see what Dell does. If they're smart, they'll leave the brand alone. If the brand is tainted in the eyes of gamers, then the acquisition won't live up to its potential," he said.
Alienware is on track to hit $225 million in sales this year, up from $172 million in 2005, according to recent projections by Gonzalez, the privately held company's CEO. Aguila is president.
Dell revamped its XPS line in 2001 to feature high-powered, high-priced computers to better compete with companies like Alienware and Voodoo PC, another niche player. Earlier Wednesday, Dell launched its XPS 600 Renegade system for gamers starting at $9,930 with a flat panel monitor.
"Alienware's products are an excellent complement to Dell's own line of high-performance computers designed for gaming, enthusiast and media content customers," Chairman Michael Dell said in a statement.
"We believe that Alienware will realize significant advantages from Dell's world-class supply chain and operational efficiencies," Gonzalez said in a statement. "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."
Gonzalez and Aguila didn't immediately return e-mails seeking additional comment. Dell officials also did not respond to a telephone call.
Alienware's least expensive laptops and desktops start at around $700, but the top-of-the-line, liquid-cooled ALX models can approach $10,000 when fully tricked out with dual-core processors, hard drives that can store up to a terabyte of data, and state-of-the-art graphics cards.
Its machines cost hundreds of dollars more than similarly configured machines from mainstream manufacturers.
Alienware has branched out a bit by offering some cheaper computers. It also has growing sales of workstations and servers — not shaped like alien heads — to corporate and government clients, such as Lockheed Martin and the U.S. Army. Gaming PCs, however, still make up 80% of sales.
Gonzalez, 40, envisioned a big market for these PCs when he came up with the idea for Alienware, so named because of his interest in UFOs, science fiction and "The X Files" television series.