Dell acquires high-end PC maker Alienware

Dell has agreed to acquire PC maker Alienware for an undisclosed sum.

The maker of high-end gaming and multimedia computer systems will continue to operate as an independent subsidiary.

The transaction marks Dell's first acquisition of a fellow computer maker. The company has achieved growth so far by boosting its own market share.

Alienware specialises in high performance computers that differentiate themselves through design. Dell, meanwhile, has become synonymous with basic, inexpensive boxes.

But the world's largest computer maker has recently been pushing its XPS line in an attempt to gain a foothold in the high-end market.

"Alienware's products are an excellent complement to Dell's own line of high-performance computers designed for gaming, enthusiast and media-content customers," said Michael Dell, founder and chairman, in a statement.

"In addition to offering high-quality, high-performance products, Alienware has tremendous brand appeal with consumers and creative business professionals. "

Dell's financial performance has been under pressure in recent quarters. The company has struggled to sell computers in the high performance segment, and has seen the majority of its sales shifted to inexpensive systems.

High-end systems offer stronger profit margins than the volume business for which Dell is best known. The volume segment is also facing fierce competition from Asian manufacturers.

Rahul Sood, chief executive at Voodoo PC, an Alienware competitor, first hinted at the deal three weeks ago in a blog posting. 

Sood pointed out that high-end PC makers were challenging Dell's "perceived technology leadership" which could ultimately undermine its position in the consumer market.

He also argued that the rise of Apple had stolen Dell's spotlight as the trendsetter for the PC business.

See also:

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Dell dumps hard-drive MP3 players

No connection with Apple's iPod domination, apparently  07 Feb 2006

Dell talks up 3G wireless notebooks

Latitude models will include Novatel 3G modems  29 Jan 2006

Dell denies plan to close plants in Ireland

Rumours of shift of notebook assembly lines to Malaysia 'incorrect'  27 Jan 2006

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