GadgetByte Nepal

The consumer tech market is fiercely competitive with brands launching new models all year round. But here’s something you might not know or even thought of: many of these brands don’t actually manufacture their own devices. Instead, they turn to third-party companies called Original Design Manufacturers (ODMs). In this article, we’ll explore what ODMs are and why they play such a critical role!

What is an ODM?

Tech companies (Smartphones, Laptops, Wearables) release their products every now and then, and you might be wondering if their manufacturing process is really that quick. Spoilers…things happen a bit differently than you’d expect!

An Original Design Manufacturer (ODM) is a company that takes on the full responsibility of designing and manufacturing a product according to another company’s specifications. The brand then sells the product under its name. Essentially, ODMs handle everything from design to production, allowing the client company to focus on branding, marketing, and distribution. And that’s how you get 6 products in 12 months from a brand that you’d thought was just a few years old!

Inside Story

Several leading smartphone brands rely heavily on ODM (Original Design Manufacturer) partnerships for their devices. For instance, a significant 90% of Motorola’s smartphones are ODM-based. Other major players in the industry also rely on ODMs to a large extent, with 78% of Xiaomi’s phones (including those from its sub-brands Redmi and Poco) being ODM-produced. Similarly, Vivo sources 52% of its devices through ODMs, while Honor and Huawei depend on ODMs for 40% and 44% of their phones, respectively. Even Samsung, a dominant force in the smartphone market, has 27% of its phones manufactured by ODMs. OPPO, including its sub-brands Realme and OnePlus, also sources 39% of its smartphones through ODM partnerships.

Don’t get confused

There’s also this other term called the OEM (Original Equipment Manufacturer) but that’s a bit different. While ODMs design and manufacture products for other brands, OEMs typically produce parts or products that are sold under another company’s brand name without involving design. A good example of an OEM is Foxconn which manufactures Apple’s iPhones according to the brand’s design and specifications. Here, Foxconn is not involved in the design process and only handles the manufacturing side.

Why do companies rely on ODMs?

One of the biggest reasons companies use ODMs is cost-effectiveness. Manufacturing a product from scratch is a time-consuming and expensive process. By partnering with an ODM, companies can bypass the need to hire designers or invest heavily in manufacturing infrastructure. ODMs often have pre-designed prototypes ready to go, making it quick and affordable for companies to launch new products.

Other benefits

Brands like Xiaomi, Oppo, Vivo, and even Samsung often turn to ODMs for their budget and mid-range smartphones. This allows these companies to focus their resources on designing and producing their flagship smartphones while leaving the lower-end models to ODM specialists.

• Also, read:
  • Why Nepali OEM brands are dominating the mobile accessories market
  • Apple’s MicroLED Watch delayed by a year because of manufacturing issues
  • Huawei manufacturing its own 5G chipsets this year partnering with SMIC

Moreover, ODM allows companies, especially newcomers with limited resources or manufacturing expertise to bring products to market quickly without the heavy investment in R&D, hardware, and production facilities. This gives them the freedom to focus on areas like branding, marketing, and distribution, where their expertise truly lies.

Not just the hardware manufacturing, ODM can even handle the software side of things, though this typically comes at an additional cost.

And it’s not just smartphones that use ODM. Brands like Boat and Firebolt also rely on ODMs for their smartwatches and TWS.

Are ODM-manufactured products good enough?

Coming to this end, you might have doubts about the ODM-manufactured products. Are they really that bad??? Well, just because the product is ODM does not mean it is valueless. In fact, many high-quality devices come from ODM manufacturers. It’s not about whether the product is made by an ODM or not, it’s about the specific company’s standards and the client’s involvement in the design and quality control.

• Meanwhile, watch our Best Phones Under ₹ 25000 video: