Original design manufacturer


An original design manufacturer is a company that designs and manufactures a product, as specified, that is eventually rebranded by another firm for sale. Such companies allow the firm that owns or licenses the brand to produce products without having to engage in the organization or running of a factory. ODMs have grown in size in recent years and,, many have the scale to handle production in-house for the products that are branded by the buying firm. This is in contrast to a contract manufacturer.
This model is especially used in international trade, where a local ODM is used to produce goods for a foreign company that sees some advantage in the transaction, such as low labor-inputs, transport links or proximity to markets. Innovative and/or patented technologies developed/owned by the ODM are another cause for this product distribution model. ODM models are also used where local ownership-laws possibly prohibit direct ownership of assets by foreigners, allowing a local firm to produce for a brand company - either for the domestic market or for export.
This type of business is part of "outsourcing". For example: Compal Electronics makes notebook computers and monitors, and operates as a mass producer for numerous brand companies, assisted by low labor-costs, low-cost transport, and the near-commodity nature of the physical inputs., Taiwanese ODMs made ninety-four percent of all notebook computers.Some companies such as Flex and Wistron are both ODMs and providers of Electronics manufacturing services.
Post-2016 Nokia phones is an example of a firm which relies on ODMs. In late 2019, it switched from relying on only one ODM to multiple ODMs.

Intellectual property

ODMs create their own intellectual property and are very proactive in patenting it. Most of their patents are filed in the US, China, and Taiwan.