UPDATE March 22, 2006: Looks like I was right.
I recently wrote a column for the upcoming issue of Custom PC Magazine. You’ll have to pick up a subscription to read it, as I said before this is among the best “hardware lifestyle” magazines in the world. Although Computer Power User, PC Gamer, and Maximum PC are also among my favorites, Custom PC is fantastic; the photography is good enough to eat, and the layouts are scrumptious.
The story is about Dell and the changes that I think they will go through this year. The column is called “The Bear Hath Awoken”, and the following is the “sequel” to the column.
Dell + Alienware = Dellienware. Is it possible? Yes, at least I think so. I won’t get too far into details as to why I believe this is going to happen, but I will offer some of my thoughts. Even though Dell has never been known to make acquisitions, times are changing and so is their brand positioning.
First we all know that Dell cannot risk losing their stronghold in the server space therefore a potential relationship with AMD is bound to occur. That still leaves the question of the consumer market.
With the recent Intel/Apple relationship it’s clear that 15% (or whatever) of the consumer space for Dell may not be enough. Apple is likely to go to 8% with the help of Intel over the next year or so. 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.
These are just some observations;
1) Dell is not unlike a big bad bear that has been awoken from his hibernation.
2) Dell knows they need to grow, and they need to be perceived as a leading edge company.
3) Dell can’t crack the “cool” factor with the Dell brand.
4) I’m pretty sure if offered a check (cheque for my Canadian/U.K. brothers and sisters) the guys at AW may jump at the chance to cash it.
5) Dell could take on another brand and grow it as an individual brand separate from Dell – perhaps?
Why the potential for a Dellienware and not another?
Alienware is widely considered to be the volume leader in gaming, they have scale. To me scale isn’t as important as “customer experience”, but time will tell if I’m right. I have not for a second ever considered dumping our price in order to compete head to head with Dell like our competition has. I believe the Voodoo brand is all about the experience, and as a result we keep adding more value to our experience – and we will continue to do so regardless if this happens.
On the other hand I can't fault my competition for single handedly taking on a giant. Though I believe it changes their brand position I think they have had Dell in their crosshair for years.
I am not sure about the move for Dell, but I am sure that Steve Jobs is God according to Wall Street, Hollywood, and every mainstream publication – and I think Michael Dell wants to change that. I can think of better ways of changing it, but hey, what do I know? This is all pure speculation.
Whether I am right or wrong AMD is going to win – and Dell may likely come out a winner as well. Imagine what a deal like this does to change our landscape.
This year will certainly be an interesting one no doubt. Of course when I say “Dellienware” I am being facetious, but I believe an acquisition is on the horizon. I'm looking forward to the comments, I think this should make for an interesting topic.
This goes out to Charlie from the Inq: If this does indeed occur I still win and you’re wearing a bunny suit even if I have to throw you in it myself!