Deal for Alienware brings AMD Processors Into the Mix for Dell

In one fell swoop, Dell is acquiring a system builder, Alienware, and will finally start offering desktops and notebooks with processors from Advanced Micro Devices.

March 25, 2006

2 Min Read
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In one fell swoop, Dell is acquiring a system builder and will finally start offering desktops and notebooks with processors from Advanced Micro Devices.

The Round Rock, Texas-based vendor said last Wednesday that it plans to acquire Alienware, a maker of high-end desktop and notebook PCs that use processors from both Intel and AMD. Dell is a longtime Intel partner and offers the company’s processors exclusively in its line. Alienware, Miami, has a strong AMD lineup but will operate independently from Dell and will keep its existing brand identity separate, according to Dell and Alienware.

Terms of the agreement were not disclosed.

Andy Kretzer, director of sales and marketing at Bold Data Technology, a Fremont, Calif.-based system builder, said the deal shows just how quickly the IT space is changing. “Intel in Macintosh, AMD in Dell,” Kretzer said. “It’s a strange new world.”

The most interesting part of the deal, said Kretzer, is Dell finally tying the knot with Sunnyvale, Calif.-based AMD despite pressure from Intel. “This is a back door in for AMD,” he said.In addition to its gaming PCs, Alienware builds a series of Intel-based and AMD-based business PCs, as well as Intel-based rack-mount servers, giving Dell an opportunity to get into the home and business space using AMD processors without upsetting its relationship with Intel, Santa Clara, Calif.

A Dell spokesperson said the acquisition of Alienware does not signal any change in supplier relationships for Dell products. Instead, the intent is to allow Alienware to continue to operate as a separate entity, one that will continue to use AMD processors.

The more disturbing side of the deal for some system builders comes from the continuing trend of smaller companies either being acquired or quietly disappearing, Kretzer said.

“This is something that will make it even more difficult for system builders to have any leverage with the vendors,” he said. “Now we’re getting larger tier ones dictating to the Intels, AMDs and Microsofts of the world, not like a couple years ago when those companies dictated to Dell, HP, IBM, Acer, Bold Data.”

Alienware will maintain its own product development, product marketing, sales and technical support, according to Dell.“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 Dell Chairman Michael Dell in a statement. “In addition to offering high-quality, high-performance products, Alienware has tremendous brand appeal with consumers and creative business professionals.”

Rumors on the Web and among financial analysts had suggested that Dell was seriously looking at Alienware as a way to beef up its offering on the higher end.

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