Dell and Alienware: A Mismatch Made In Heaven? - InformationWeek
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3/23/2006
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David  DeJean
David DeJean
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Dell and Alienware: A Mismatch Made In Heaven?

I've been trying to think of apt similes for "Dell Buys Alienware." It's like "Kia Buys Ferrari," or "J. Howard Marshall II Marries Anna Nicole Smith" -- something that at first glance seems sort of ridiculous, and the longer you think about it, the less sense it makes. Dell's been going through a bad patch and could use a shot of good PR, but is being laughed at the kind of PR it really wanted?

I've been trying to think of apt similes for "Dell Buys Alienware." It's like "Kia Buys Ferrari," or "J. Howard Marshall II Marries Anna Nicole Smith" -- something that at first glance seems sort of ridiculous, and the longer you think about it, the less sense it makes. Dell's been going through a bad patch and could use a shot of good PR, but is being laughed at the kind of PR it really wanted?Obviously Dell is hoping for a personality transplant. The two PC makers could not possibly have less in common. Alienware PCs stand out in any crowd -- overpowered, overendowed, overpriced. Dell PCs have all the flash and dazzle of day-old bread.

This, in fact, may be Dell's biggest problem, even bigger than the hits its customer service has taken: Dell is not a brand. It's a price point.

Dell has ruthlessly cut the cost out of its products. Unfortunately it's also cut out anything that differentiates the product line. John Dvorak makes this point in his MarketWatch blog: Dell makes products "which simply put, have no flair. Fundamentally a Dell computer is the same as most Chinese manufactured machines made by every me-too vendor selling PCs."

Amen.

But can the Alienware acquisition turn that around? I can see a future Dell catalog with a PC on the cover that looks like a Stormtrooper's codpiece, but does that represent a fundamental change in Dell's business model?

Dell has always represented a safe choice, not a performance choice -- and it underscored that image with legendary customer service. Unfortunately what was once a legend has become merely a myth. (If you want to read somebody who's really mad about Dell service, see Ed Bott's blog.)

The issues haven't changed. People who buy computers still expect to get them fixed when they break -- a lot more people, I suspect, than the number of people who want a candy-colored tangerine-flake case.

Experience tells me that Dell buying Alienware will almost certainly mean the end of Alienware. It will lose its anti-establishment, rogue-boy cachet and its managers won't even notice because they'll be too busy responding to memos from headquarters about why they're not cutting costs fast enough.

Whether it means the start of anything for Dell is an open question. It could kickstart an effort by Dell to differentiate its PCs in the marketplace -- to sell style and features. But in the long run it can't sell PCs it can't service, no matter how stylish they are.

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