Network Engineers Group

OEM -- or original equipment manufacturer -- is defined as a company that manufactures a product that is sold to another company, which resells the product under its brand name. Business textbooks often refer to OEMs as "contract manufacturers." The genesis of the term OEM comes from the Dutch phrase, loosely defined, simply means "under own brand." The term is flexible, but OEM usually refers to manufactured products in major industries. Yet it could also mean a company that makes the ingredients that go into a fast-food milkshake, for example. OEMs are different than value-added resellers, or VAR's. A VAR is a company or business that buys the OEMs component, part or product, and either improves on it or adds even more components to increase its value and ultimately sell it to customers directly. A good way to look at OEMs and VAR's is this . . . An OEM usually sells its products on a business-to-business model. A VAR sells directly to OEM cus...

What is OEM? Designing and manufacturing electronics hardware products has evolved into two camps. One camp is the OEM. The other is comprised of contract electronics solutions providers, who often subcontract with each other for the same OEM customer or program. Details below on differences between these firms plus, why you must know, especially if you are looking to reduce or manage your EMS sourcing spends. OEM – Original equipment manufacturer The original equipment manufacturer (OEM) is the brand owner, the company whose logo displays on the final product. Think Cisco, Dell, Samsung, Lenovo, LG, Microsoft, Apple … For example. Apple’s iPhone has the Apple logo clearly visible to users. Apple is the OEM. Apple designs its products, but Apple outsources the majority of iPhone manufacturing production to contract electronics solutions providers. Both EMS and ODM. Apple does this to leverage cost to scale. It's cheaper for OEMs to pay another company (solutions provid...