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Dell seeing UFOs in Alienware?

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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Tom Krazit

My colleague Rich Brown over at CNET.com's product reviews reported Tuesday that an anonymous source told him Dell has agreed to purchase Alienware, although he stressed the news was unconfirmed.

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

But Dell has been looking to grow at the higher end of the PC market in recent quarters, after selling too many low-end PCs in 2005. The deal would present an interesting dilemma for Dell, since Alienware uses in some of its systems.

A Dell spokesman declined to comment when asked about the potential Alienware deal. Alienware released a statement to Rich 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."