OEM

acronym for Original Equipment Manufacturer.

An OEM is a company that builds components that are used in systems sold by another company called a value-added reseller or VAR. The practice of a VAR selling products with components from OEMs is common in the electronics and computer industry. Typically an OEM will build to order based on designs of the VAR.

In common usage, a VAR is sometimes called an OEM, despite this being a complete reversal of the literal meaning of both terms. This misunderstanding 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.

In recent years, some OEM's have also taken on a larger role in the design of the product they are manufacturing. The term ODM, Original Design Manufacturers is used to describe companies that design and manufacture a product that is then sold under other brand names.