The
original design manufacturer retains property rights. Suzanne Berger cites the example of Quanta supplying Dell:
"Some of the world's most successful firms today, like Dell, have radically separated product definition, design, and marketing from manufacturing. Quanta, a Taiwanese ODM notebook manufacturer, succeeds with no links to final customers, no brand, and little involvement with product definition."
(Berger, S. and R. K. Lester, eds.,
Global Taiwan: Building Competitive Strengths in a New International Economy, 2005, MIT, p. xvi)
Moving up: ODM to OBM
"EMS and
ODM companies are subjected to different types of risks.
ODM companies, thanks to their patented intellectual property, may decide or have already started to sell products under their own brand, becoming own brand manufacturers (OBM). One example of this trend is Acer, which successfully upgraded from
ODM to OBM but still retains manufacturing and
ODM activities for other brand-name firms. This situation also introduces risks in terms of intellectual property: with a shift to OBM, the
ODM company effectively becomes a competitor for the brand-name firm it previously supplied. Brand-name firms or OEMs are therefore reluctant to share sensitive information on their design owing to the threat of potential competition."
(International Labour Organization (ILO),
The production of electronic components for the IT industries: Changing labour force requirements in a global economy, 2007, visited 2010-02-09)
