March 14, 2006 7:10 PM PST

Dell downplays Alienware acquisition rumor

Dell has moved to quash rumors that suggested the company has acquired rival PC vendor Alienware.

Speculation about a possible buyout has been rife since Rahul Sood, CEO of original equipment manufacturer Voodoo PC, posted his thoughts on such a move on his blog two weeks ago.

"The PC gaming market is threatening Dell's 'perceived technology leadership'--and ultimately the consumer space. The Alienware brand is cooler than Dell, and perhaps a likely candidate for Dell to take over based on size alone," Sood wrote.

Sood's speculation was corroborated by an anonymous source "at a high-end vendor" who told CNET.com senior associate editor Rich Brown that "the deal has been done...(and) his company has received an influx of resumes from Alienware employees."

Questioning the accuracy of the information, Paul McKeon, Dell Australia and New Zealand spokesman, said the original source--Voodoo PC--is unreliable since the company is an Alienware competitor.

"I'd suggest you take that speculation with a grain of salt given the origin stated in the blog (Alienware's competitor)--you can never be sure what the motivation is," McKeon told ZDNet Australia via e-mail.

He also questioned the reasons behind such an acquisition, stating that Dell has the potential to be seen as a "cool" company and is more than capable of building viable gaming machines without Alienware's help.

"Dell's XPS range already offers better performance and better value than Alienware's machines, and in the XPS mobile concept you've seen the potential of one of the cool new things Dell could do this year," McKeon added.

Meanwhile, Alienware released a statement to CNET.com that read in part, "At this time, Alienware will not comment on any speculative stories or rumors concerning Dell and Alienware's association. While we do believe that news stories like this are ultimately a strong positive reinforcement of the Alienware brand and the company's success, we will not comment on speculation or potential future events."

Roger Kay, president of research firm Endpoint Technologies Associates, told CNET News.com that the deal would be somewhat surprising given Dell's historical reluctance to grow through acquisitions and the heavy marketing budget it allocated for its own high-end XPS PC lineup. Alienware makes distinctively styled PCs for gamers and PC enthusiasts that tend to be pricier than basic Dell systems.

Asher Moses of CNET Australia reported from Sydney.

See more CNET content tagged:
Alienware, speculation, acquisition, rumor, Voodoo

 

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