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OEM explained

OEM Stands for Original Equipment Manufacturer. This is a misleading term. An OEM company purchases equipment from a manufacturer in bulk and customizes them for a particular application. They then sell the customized products under their own name. The term is really a misnomer because OEM companies are not the original manufacturers -- they are the customizers.

There is no specific standards as to how much the product is customized. Large companies (ie: Dell, Compaq, etc.) will often create their own component drivers and/or modify the hardware for their specific needs. Other companies may put their logo on another companies product. For example, Creative Labs does not manufacture CD-Rom drives, so they purchase Panasonic, or Samsung CD-ROM drives, put their logo on it and bundle it with their sound cards. OEMs also offer to distribute and market their OEM products as bare bone components to be sold in bulk to system builder (ie: Dell, Compaq, Abax, etc).

OEMs are allowed to Market OEM products with the same product name as their retail box counterparts, but will have different part numbers for support reasons. Most OEM products are physically not different from their retail box counterparts, and almost always work with the same drivers, but not in every situation. Don't expect large company OEM components (like a USR modem in a Dell computer) to work in another system. You may be subject to limited support from a large system builder (with unique drivers and/or hardware) or the brand name manufacturer to help you install OEM products in anything but the original and/or another brand name computer.

OEM product support will come from the system builder, who receives additional support from the OEM distributor and OEM company rather than from the brand name manufacturer. Some brand name manufacturers choose to provide support for their "OEMed" products, but are under no obligation to do so.

System builders are legally subject to either sell and install an OEM product in a new system, or to sell an OEM product along with at least one other product bundled together as one purchase. All OEM products come without a retail box as they are shipped and purchased in bulk. Component drivers are included when necessary. In rare cases, duplicate drivers may need to be copied by either the distributor or the system builder. It is the system builder's discretion as to what driver(s), and/or etcs. will be provided to the end user. OEM products will often exclude retail bundled software and/or accessories. This allows the system builder to sell brand name products, at a competitive price. For this reason, a system builder who assembles OEM products is often referred to as a "Value Added Re-seller" (VAR).
Marc Kobayashi
January 16, 1999

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