HP Buys Voodoo PC

HP has announced that it will acquire boutique PC and notebook maker Voodoo PC. Voodoo PC is based in Calgary Canada and 60% of their PC sales come from notebook computers -- most of which are high-end gaming notebooks.

It's of course no irony that Voodoo PC is a major competitor of Alienware,recently purchased by Dell, and HP and Dell are of course huge competitors. This purchase of Voodoo PC is most definitelya counter-strike by HP in regards to Dell's move of acquiring a boutique PC maker.

In a very interesting note, it was the CEO of Voodoo PC, Rahul Sood, that first started the Dell to buy Alienware rumor in his blogwhere he outlined why he thought it made sense. He now outlines in his online blog why Voodoo PC made the move to merge with HP. Rahul also reveals that he had been in talks with Dell in the past but things fell apart. He seems very excited about the HP relationship though.

Voodoo PC with the HP logo on it (view large image)

The Future of Voodoo PC and HP

Following the close of the transaction, HP will form a separate business unit within its Personal Systems Group focused on the gaming industry. VoodooPC co-owner Rahul Sood will become chief technologist for the unit and co-owner Ravi Sood will become the unit's director of strategy. This acquisition, once closed, will extend HP's presence into the high-performance gaming market and globally expand the reach of the VoodooPC brand.

This is different to Dell and Alienware in that Dell has not formally merged with Alienware nor shifted executives from Alienware into Dell positions. So while the Voodoo PC brand will be maintained, the tie between HP and Voodoo PC will be more visible than it is between Dell and Alienware it seems.

Voodoo PC History

Voodoo PCheadquarters in Calgary Canada(view larger image)

Voodoo PC is the creation of Rahul Sood who was later joined by his older brother Ravi Sood. Founded in 1991, Voodoo was an early innovator in the early era of custom high-end PCs. Initially they established themselves for putting together very powerful gamingrigs. Over time, even the most powerful components began to become commoditized. Voodoo PC switched to differentiating their products through service and construction. Rather than cashing in on the brand and going main-stream, as many of their early competitors did, Voodoo PC continued to perfect their offerings.

Voodoo PC notebook paint job area(view larger image)

Currently, 60% of Voodoo's sales come from notebook computers. This reflects a shift in the PC market whereby most consumers are recognizing the benefits of going portable as the compromises become fewer and less significant.

Voodoo PC desktop being assembled at the Calgary headquarters(view larger image)

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I expected something like this to happen sooner or later. HP needs a little more oomph to satisfy gamers.

 

I wonder if Voodoo remain a seperate entity like Dell allows AW to be... the paint job of the first picture up top raises my eyebrow.

I am actually kind of suprised by this given the way Voodoo's CEO started and propogated the rumors of AW being bought by Dell. But guess I'm wrong to be.

Wonder what's next. Hypersonic and Toshiba?

 

WSJ's take:

H-P Plans to Buy Voodoo,
Start Push Into Gaming
By CHRISTOPHER LAWTON
September 29, 2006

Hewlett-Packard Co. said it will buy Canadian personal-computer maker Voodoo Computers Inc. and start a gaming division, its first major push into the small but profitable PC-gaming market.

Terms of the deal weren't disclosed. Closely held Voodoo Computers, Calgary, Alberta, makes high-end PCs that are popular with gamers who are willing to pay high prices for PCs with the latest processors and graphics cards. The acquisition follows a similar purchase by H-P rival Dell Inc., which in March bought Alienware Corp., a PC company also popular with gamers.

Voodoo computers sell for an average $5,000, compared with about $800 for the average consumer PC purchased at retail, analysts say. Roger Kay, an analyst with Endpoint Technologies Associates Inc., estimates Voodoo will have more than $115 million in revenue this year.

The purchase further pits PC makers against game-console manufacturers such as Microsoft Corp. and Sony Corp., in a battle for the gamer space. Stephen Baker, vice president of industry analysis for NPD Group Inc., says the PC gaming market has recently gotten a boost at the expense of the console market as gamers transition from older consoles to new systems.

Todd Bradley, executive vice president for H-P's PC group, said the company has looked at the gaming space as an expansion area over the past year. "The gaming market is clearly a high-end space that we haven't participated in broadly," he said. He adds that company research shows more than three million PC gamers in North America. The gaming PC market's revenue is estimated at nearly $1 billion, according to Rob Enderle, principal analyst for Enderle Group.

Voodoo sells its wares directly to consumers, bypassing retail stores, and H-P said it will continue to do so. As a result, analysts said Voodoo's brand won't conflict with sales of H-P PCs in retail stores. In addition, H-P's size and global reach can give Voodoo new distribution and supply-chain efficiencies that it didn't previously have, analysts say.

Voodoo will be the hub of H-P's new gaming unit and its operations will stay in Calgary. All 30 of Voodoo's employees are expected to stay on.

Ravi Sood, Voodoo's chief executive, will be head of strategy and marketing for H-P's gaming business world-wide. His brother Rahul, Voodoo's president and founder, will be H-P's chief technologist for gaming.

 

It'd be nice to see HP features like QuickPlay and Lightscribe make their way to Voodoo notebooks.

 

what makes voodoo computers so rediculously overpriced??? the components are all pretty much the same as a dell...???

 

if hp can obtain a "gaming rig" from voodoo pc and sell it for a budget... that'll be good... cuz hp's 7600 just can't compare to dell's 7900gs and alienware's 7900gtx... so if they just bought voodoo for "profitable" purposes thats kinda pointless for us, the consumer, and voodoo gets better "circulation" great, but what about those who want an hp/voodoo but don't want to pay like 4 grand for a decent system...

 

I agree with hbomb174. Who the heck buys a 4k noteboook when you can get the same thing for 1.5k less. Sure it won't have the fancy paintjob, but to pay that much more for paint is ridiculous.

 

Voodoo pc is the only place I have ever seen a computer able to be configured for $25000.... even Alienware with similar specs costs less than half as much!

 

So does it mean that prices are going to drop?

 

Voodoo offers some reeeaaaly nice PCs. I have only seen one Vodoo (desktop), sure they are overpriced but the quality was very nice. They personally build everything piece by piece so you get only the highest quality and everything works and will work perfectly. They have very good support too. I have a lot respect for Vodoo, I know they are overpriced like hell but hopefully HP can bring down their cost with out bringing down their quality or support. I would get Vodooo PC if price was not an issue with me.

 

Let's face it, all of these manufacturers are using the same stuff. It all comes down to style and workmanship. We all want a computer that works exactly to specs. I think Voodoo has got both the style and the workmanship, but it's that darn price that keeps everyone away. Who wouldn't rather have a custom painted Voodoo over a Dell with the same specs? Heck I would have bought one over my beloved W2v if the price was anywhere near the W2.

Voodoo just has to bring the price closer to the competition and then charge a reasonable fee for the nice paint and then they will start to take some of the pie and make the real money.

Do you hear that Voodoo and HP. We like your stuff, but we ain't paying $220.00 for a tattoo. Duh!

 

Interesting development. Not totally unexpected though, I guess.

 

There was actually a little more "edgy" article on the sell out that I read about it.

 

I don't know that I would call that an article, but whatever.

Voodoo took the cash, hard to blame them for that. I doubt any of us would have rejected such a deal. It's good for HP and Voodoo, I'd guess they double their sales now with a more aggressive marketing plan behind the products.

 

The days of someone paying a few hundred dollars for some rolled up cables and a paint job are over. I'm not saying that VooDoo doesn't make quality hardware -far from it! But your average consumer wants value for their money, and that value is measured only on the performance of the machine. Style is good, but it's not important, and even Apple is smart enough to know that you can't expect someone to pay top dollar just because the out of the package experience is cool. There is just no way that VooDoo can sell their computers in large quantities unless they bring the price down -and if they did have large volume sales then they wouldn't need HP. VooDoo could just go to a Korean ODM with their own hardware designs and have them mass produced...

IMHO there in a paradigm shift in the works and you can see it here on this very forum. I know I'm not the only one waiting for the new Asus and Acer notebooks to come out because I want a laptop that weighs less than 3 kilos and yet has a Core2Duo CPU and a Nvidia 7600 / 7700Go class GPU or an ATI X1600 / 1700 GPU. I want to game with all the "eye candy" enabled, watch movies, edit images, etc. and I want to do it on a laptop that won't break my back because I need to carry it with me went I travel. So it's Asus, Acer, or Zepto to name a few. The big guys like Dell and HP just don't get it -in their line of thinking either you're a business user who doesn't need graphics or you've got deep pockets and don't mind scolioses, but there is no middle ground. Dell almost got it right with the XPS M1210 -close, so close. The first company that makes a laptop under 3 kilos with a 7800 class GPU will be laughing all the way to the bank...

 

Yea, I guess it was more of an opinion, but it brought up some interesting statements that were previously made that I found interesting.

 

Asus, Acer, or Zepto "get it", but come on, laughing all the way to the bank? Who sells more notebooks than any other notebook company? Who can boast enourmous revenues and market dominance? Clearly not Asus, Acer, or Zepto; you cant even get most of their notebooks easily in many countries. Yeah, it'll make people like us happier, but admit it, we're a "niche", and big companies like HP and Dell don't have to worry about niches. Even so, a lot of us buy Dell 6400(E1505) because of the price vs components. How many of us love the HP Compaq ncxxxx series(especially nc8430 even though it's not cheap) for its build quality? Clearly HP and Dell "get it", they get that making money means including everyone and not just the enthusiasts, even though we're included too.

 

What did Dell earn from buying AW ? its just an ODM reseller .

I know we , the consumers didn't see anything good out of it , so far its just free PR for Dell .

All that AW got is a brand name that stands for overpriced notebooks . Think about what Dell is really trying to say here in regards to its pricing and who is gonning to pay for it .

Same for Hp & Voodoo .

 

What Dell and HP get from these niche companies are profitable small businesses that will become more profitable once Dell and HP leverage their buying power. So whatever the margins are now, which are surely higher than any notebooks HP and Dell sell now, they're going to get even better once Dell and HP sit on the component suppliers. It's really just a margin play more than anything else. Sure, there will be knowledge exchange and other best practices changes, but don't expect anything major for a while.

 

You're absolutely right -almost. We were a niche, but we are becoming the norm. I've talked to many people who want the power that comes with a 4+ kilo laptop, but they don't want the weight...

As for volume, well you're right again -today. But tomorrow? Asus is big in Europe and they are gaining ground in the States. They won't get popular in the U.S. overnight because they don't have the add budget to push their products...

Dell and HP sell a lot of laptops not because they know what they're doing, they sell them because they have an advertising budget, the people who buy their computers consider them a good value for the money, and they have better than average customer support. I can get a Dell repaired on the base where I work here in Italy -in most cases it takes less than 2 days. But people also buy a particular laptop purely due to budget restrictions or because they are looking for a particular weight class -and every time I've picked up a new portable I've had to make compromises in performance because I wasn't willing to lug around 4 to 5 kilos of hardware. To understand why I say a company like Dell doesn't get it just go to their web site. You either buy a sub 3 kilo machine with low end or no dedicated graphics or you pay top dollar for something over 4 kilos. The only exception is the XPS M1210 and IMHO Dell blew it with that laptop. Had they engineered a sub 3 kilo laptop with at least a 7600Go GPU I wouldn't be typing this post on my old Vaio...

 

HP, a better computer than Dell also chooses a better company Voodoo PC, while Dell, makes partnership with a disaster called AW.

I think this deal is good as it will open up the horizon for Voodoo PC also.

 

who wants to game on a 12 inch screen?

 

acer went after the market shares that top 2 failed to acquire, that's why they are moving up now, surpassed toshiba...

however, for the unpopular configuration, you still have to pay more for it. Also for the unpopular configuration, that means asus and acer has to spend more money to tailor their laptop to fit that configuration and test and verify that it works...

yes it sure be nice to have a 12in laptop with 7900go in it but company needs to break out their brain juice to solve that heat and power issue with such a small chasis and such under power battery and to do that all thin and light it's probably too much hassel and not gonna gurantee the return on investment...

as for hp + voodoo that makes sense since hp doesn't have a gaming side to their desktop and laptops... however, it baffles me why dell would go out to acquire AW when they could have grow their own xps line into the same thing... looks like they just wanted additional marketshare and fatter profit at that time while hp was chipping away at them...

short term we are not going to see any changes, it's all up to how hp and dell merge those acquisitions into their portfolios in the future then we can make a judgement... hopefully it's like what ppl are saying here... stylish hi performance pc and laptop for cheap in the future...

thanks,
sg

 

I for one am excited. I have always had hp's I find that they are a solid company, that normally has what I am looking for, but they always have been a little weak on the gaming side. And I have drooled over Voodoo for quite a while but quickly wiped it up after seeing my price tag of the laptop I had just customized. If they can meet somewhere in the middle, then I think it would be more than worth it for both companies.

 

when you purchase a voodo pc you get more than a regular dell pc. they burn in the computer and benchmark the computer and give a folder with all of the tests printed out and all of the disk in the folder , you get a custom paint job, quality parts, and something that is going to last for a while.

 

I agree.

I myself am hoping HP, while keeping VooDoo running on its 'own,' also starts a gaming rig running under the Pavilion line. It'd help HP gain even more market share against an already failing Dell, and it would also help HP build more of a larger line to offer consumers who don't want to spend $3500 on a gaming computer.

 

quite surprised... shocked actually...

i bought into the Voodoopc and really like the "ownership experience" of a "premium" boutique equipment that gives a sense of exclusivity...

well, as a business move, i am sure it was a sound business move on behalf of voodoo...

best wishes...

well i too hope voodoo and hp are left separate entities and allowed to continue as before...

well, if Ford can do Jags, i guess i can allow HP to do Voodoo... or can i???