Well, sometimes rumors do come true and this is one of those times. Today Dell announced that they are indeed buying Alienware. As I speculated a couple weeks ago, Dell will let Alienware act as a standalone unit and that a primary reason for buying them was their excellent brand:

“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, chairman.

Yep, brand appeal and high-end products. Alienware is going to be Dell’s new Caddilac. It’s sleek, sexy, and has high profit margins. All in all, I think this is a great move for Dell. Way to go Dell, you’ve made another step into a much more mature business model.

Read The Press Release

Dude, you’re getting an Alienware. News article at The Inquirer outlining why it makes sense.

The Mole’s Take

I think this is a move that Dell needs to make. Dell has driven down prices to the point that they have razor-thin margins on their consumer PC’s. Most of Dell’s money is made in Corporate lease and server deals. That’s where the money is. The consumer PC business is not a place where Dell makes a lot of money. Their companion products aren’t exactly selling like iPods either. Buying Alienware would make a lot of sense because they have a high profit margin and are really good at selling gaming PC’s. If Dell does this they will most certainly need to retain most of Alienware’s operations as they currently are. If Dell tries to make Alienware into something that resembles Dell, then they would kill it and gamers would go elsewhere for their gaming rigs.

One thing is for sure, Dell is a cheap computer company and not a “cool” computer company. No matter how shiny you make a Dell, it still isn’t “cool”. The best evidence of that is the Dell DJ’s and other music devices. They are a joke and haven’t even put a dent in the iPod that it was intended to kill. Now that Apple is going Intel, Dell needs something to help their consumer image, otherwise cheap is not going to cut it.

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