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Seeking Sizzle, Dell Goes Alien

March 24, 2006

Dell Computers • Advertising • Credit Card Fraud • Dell Finance • "No-Interest" Offers • Rebates • Restocking Fee • Sales Practices • "Surprise" Loans Service • Customer Service • Tech Support • 30-Day Return Policy • Warranty Products • Laptops • Printers • Plasma TV Customers • Deployed Military • Small Business Customers • Dell Defenders --- News • Dell Closes Sales Kiosks • Wal-Mart To Sell Dell Computers • New York Sues Dell on Consumer Fraud Charges • Dell Breaks Microsoft Stranglehold • Dell Settles Class Action Over Financing Practices • Dell Recalls Notebook Computer Batteries • Chinese Consumers Sue Dell • "Exploding" Dell Laptop Destroys Truck, Imperils Outsdoorsmen • Dell Denies It Knew of Overheating Battery Problem for Years • Dell Cuts Rebate Program Amid Complaints • Seeking Sizzle, Dell Goes Alien • Dell Sales & Earnings Down, Complaints Up • Computer Vendors Charge More For Less Service • Class Action Accuses Dell of Defrauding Customers --- Recalls • Dell Recalls Notebook Computer Batteries • Dell Recalls More Notebook AC Adapters • Dell Recalls Notebook Power Adapters Analysis • Dell Wins Complaint Derby • To Dell & Back • Dell Talks Back

Down-home Dell is going alien. The Round Rock, Texas, purveyor of low-cost run-of-the-mill computers is buying Alienware, which makes sleek, expensive machines favored by gamers and other high-end users who place a higher premium on performance than price.

Dell said it agreed to pay an undisclosed sum for closely held Alienware and said it would operate the Miami-based company as a stand-alone unit. It will make its highly efficient supply chain available to Alienware, which should further improve profit margins on Alienware machines.

Dell has its own line of high-performance machines, dubbed XPS for "extreme performance system." The most expensive sells for about $3,500.

Alienware's machines cost as much as $5,000. They use the latest and most powerful chips from Advanced Micro Devices and have equisitely crafted cases. Dell uses Intel chips and isn't known for the asethetics of its boxes.

Dell said it would maintain both the XPS and Alienware product lines. Alienware co-founder Nelson Gonzalez will continue as chief executive of the Alienware unit. Though the purchase price wasn't disclosed, industry observers estimated it at $300 million.

"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, Dell chairman.

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