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Dell acquisition start of AMD relationship, says analyst

Posted: 24 Mar 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Dylan McGrath? Mark LaPedus? Alienware Corp.? Advanced Micro Devices? AMD?

A prominent semiconductor industry analyst characterized Dell Inc.'s proposed acquisition of high-end PC supplier Alienware Corp. as a way for the computer giant to "back its way" into a relationship with Advanced Micro Devices Inc. (AMD).

For months, rumors have persisted that Dell is seeking to develop servers based on AMD microprocessors, a move that would strike a blow to Intel Corp., which has been Dell's only provider of processors. But to date, Dell has yet to offer any product based on AMD processors.

Miami-based Alienware offers a wide range of systems featuring both Intel and AMD processors. The deal, according to Doug Freedman, senior analyst at American Technology Research Inc., gives Dell access to a highly skilled design team that is familiar with AMD chips.

"I think this is the start of a relationship [between Dell and AMD]," Freedman said. He added that by structuring the deal as to make Alienware a wholly owned subsidiary, Dell is also protecting its arrangement with Intel.

Freedman has been saying since at least January that American Technology Research expected Dell to announce a relationship with AMD as early as this month.

Freedman said that he and his colleagues estimate that Alienware currently ships about 85,000 systems per year, less than one half of one percent of the overall PC market. Alienware's systems, basically for people who used to build systems of their own but now can afford to buy them, he said.

- Dylan McGrath, Mark LaPedus
EE Times

EE Times' David Roman contributed to this report.

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