To many people, OEMs are just another business acronym with an unclear meaning. Some may hear it, but not quite know what an OEM actually is. OEM stands for original equipment manufacturer. The definition of an OEM is starting to change slightly but is originally defined as a company that makes a part of a product that is used in another company’s finished product. This however is starting to shift slightly towards being a label used to describe many different companies and their relationships, which often intersect in bringing new IT products to the market.
What Does OEM Mean?
In the growing business of technology, OEM partnerships with companies such as ABB are becoming a vital part of many major brands’ success. So, what exactly is this elusive OEM?
It is important to note the difference between OEMs and VARs. The original equipment manufacturer is the company that builds parts for other companies. The VAR on the other hand are the value-added reseller who buys the product from the manufacturing company and uses it for their own final product. This term is important to understand when navigating the world of OEMs.
Hardware and software manufacturing and selling to companies is a necessary aspect of most IT products. Without these crucial companies and sources, they would not survive. You will see this with certain software that may be pre-installed in many computers, iPhones, and iPads in general. This is also the case with hard drives and microprocessors on computers and tablets.
The OEM Business Explained
The original equipment manufacturer partnerships can have a positive impact on the quality of a brand and their product. A relationship is vital in lessening the cost and time in developing the product yourself. This often minimizes the cost and the investment in self-manufacturing your necessary product.
The most crucial reason for a company to use an OEM partnership is that it allows for the item that is needed to be supplied by a brand with expertise in the manufacturing of that particular product. It makes for more reliability, and overall a more durable product. This benefits your product by having even more brand stability than if self-manufactured.
Most important products on today’s market such as Apple’s iPhone rely on a successful OEM partnership for production. The iPhone for instance is one of the most popular products that have ever been created and is accessible to mass consumers. Amazon’s kindle is also a groundbreaking product that relies on OEMs to work. They both rely on specialized companies to create their products, making their relationships invaluable to the market.
OEMs are vital to most of the products we use in every day life. You do not need to be an IT genius to know some of the market basics.