The company announced that it is acquiring Alienware, which makes high-end, uber-performance machines for well-to-do diehard gamers. Alienware carved itself a lucrative niche in the cookie-cutter personal computing world with its top-quality hardware and colorful, stylish case designs.
Even though box makers like Dell, Gateway (NYSE:GTW), and Hewlett-Packard (NYSE:HPQ) have snazzy systems on the market, their brands have never acquired the valuable street cred of companies like Alienware or Voodoo PC, which make costly computers with personality.
Dell tried. When it rolled out its XPS line, everyone knew that the sleek exterior and workhorse interior had Dell gunning for the Alienware faithful. With media-rich corporations also looking for stylish dynamos, Quake buffs with $3,000 to burn weren't the only ones eyeing these state-of-the-art systems. This was big business.
The terms of the deal weren't made public, but it's easy to see why Dell made the move. Even though Dell had the means to beat the niche players on price, it would take too long to match them in branding and personality.
Speculation that a deal was in the works began brewing earlier this month, when CNET (NASDAQ:CNET) reported on the rumor. Even on Dell's own user forums, posters were pointing out how the Alienware site had started to resemble Dell's own landing page.
For Dell's sake, let's hope that the comparisons end there. Alienware is valuable to Dell as long as the consumer sees it as an entirely separate entity. Dell may be able to apply its operating prowess to make the Alienware machines more cost-effective and market them to a wider audience, but it better make sure it doesn't leave any incriminating fingerprints behind. Consumers will notice, and the edgy brand will quickly feel awfully vanilla.
Well done, Dell. Now make sure you keep your grubby little hands off the Alienware panache.
Dell is a recommendation of bothMotley Fool Stock AdvisorandMotley Fool Inside Value, while CNET is aRule Breakersnewsletter service selection.Whatever your investing style, from mutual fund maestro to dividend-hungry income investor, the Fool has a newsletter for you.
Longtime Fool contributor Rick Munarriz has a pair of Gateways in his house, though he favors working on his HP computer and Dell monitor. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
