Original equipment manufacturer (OEM) refers to companies that make products for others to repackage and sell. Resellers buy OEM products in bulk, without the expensive retail packaging (e.g. radio panel, computer mother boards, remote control board without the casing) that comes with independently sold pieces.
The product itself is essentially the same as its more costly, retail-packaged ones since the only difference is the packaging (casing). OEM products are used in many industries, but are perhaps most prevalent in electronics. OEM products depend on their ability to drive down the cost of production through economies of scale.
Normally, dealers of OEM products add something of value before repackaging and selling the products. An OEM vendor could build big product, sub-systems, or systems from many OEM parts. Also, using OEM allows the purchasing company to obtain needed components or products without owning and operating a factory. For example, OEM vendor could buy RFID tag reader and tags and then develops application for inventory control under a new brand making it a new system. OEM goods gives OEM vendor wide range of creativity as this leverage gives chances for more time for product development and a lot of intricacies are avoided.
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In the computer industry, OEM software is an expression that refers to software that is sold to computer builders (Dell, Sony, Omatech etc) and hardware manufacturers (OEMs) in large quantities, for the purpose of bundling with computer hardware.
For electronics and embedded system designers especially in Africa, It is imperative for them to leverage on the opportunities OEM products offer. There is little or nothing coming out from Africa talking about original equipment production. This makes it difficult to get new products out quickly even when there are brilliant ideas. But OEM is the way out. The limited time and resources can now be channeled into real product development using suitable OEM products. Leveraging on OEM products will go a long way in helping African product developers rather than them re-inventing the wheel.