An original equipment manufacturer (frequently abbreviated OEM) is a company that builds products or components which are used in products sold by another company (often called a value-added reseller, or VAR). An OEM will typically build to order based on designs of the VAR. For example, hard drives of computer systems may be manufactured by a corporation separate from the one marketing the computers, or a loudspeaker in a stereo system made by a company that specializes in audio manufacturing.

In some usages, a VAR is sometimes called an OEM, despite this being a complete reversal of the literal meaning of both terms. This confusion arises from use of the term OEM as a verb: for example, a VAR might say that they are going to OEM a new product, meaning they are going to offer a new product based on components from an OEM.

Some OEMs have also taken on a larger role in the design of the product they are manufacturing. The term Original Design Manufacturer (ODM) is used to describe companies that design and manufacture a product that is then sold under other brand names and does not necessarily acknowledge the Original Design Manufacturer brand.

OEM hardware may be available to end-users, at considerable savings. For example, OEM expansion cards are purchased in a simple plastic bag without the additional cables or bulky box found in the more expensive retail package. It is worth noticing, though, that some brands make a strict distinction between OEM components (meant as versions of the component that are different from the generally available one, usually because they are customized for a given VAR) and bulk components, which just differ in their package.

Bulk components are actually not different from the retail ones, thus the adjective bulk should be correctly referred to the package, not to the component itself. It is a common abuse of language, anyway, to talk about "OEM product" when "bulk-packaged" is intended.

For the rest of the Wikipedia entry on the above term, go here.


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