An original equipment manufacturer (English original equipment manufacturer , OEM, translated Original Equipment Manufacturer ) is a manufacturer of components or products that do not own this in the retail brings. The term "OEM" (as opposed to "original equipment manufacturer") is used synonymously with a vehicle manufacturer in the automotive industry.
In some industries , more specific meanings of the term have become established. In the mechanical engineering and automotive industries, for example, an original equipment manufacturer means a supplier whose products are used in the manufacture of the vehicle. If the same product is later sold to replace the defective original part, it is an aftermarket sale. Frequently spare parts from competitors of the original equipment at a lower price on the independent aftermarket ( independent aftermarket sold IAM).
If a company also sells its products to end customers itself , the price reduction for delivery to resellers is referred to as an OEM discount .
A manufacturer who has a well-known brand name with positive connotations will usually also use it to sell his own or purchased goods. However, this also means that he is bound by numerous statutory provisions. For example, he has to ensure the supply of spare parts and is responsible for product liability and warranty . Furthermore, there are high costs for advertising and sales .
A contract manufacturer who does not have brand names and corresponding sales channels can concentrate entirely on research, development and production and sell his products to several brand manufacturers at the same time.
In the metalworking industry in particular, people like to speak of the “ extended workbench ” of brand suppliers.
Confusion of terms
A number of brand manufacturers supply products to retailers as well as finished products to other manufacturers. As a rule, these are identical in construction, but can differ, for example, in the fact that the outgoing goods inspection has not been carried out or through modifications as requested by the customer - in the IT industry, for example, B. some motherboard models in the OEM version with other functions or connections (mostly the housing connections). In this case, one also speaks of badge engineering .
In the automotive sector, the automobile manufacturer itself is referred to as an OEM. In the supply chain, the terms tier-1 (rank 1), tier-2 (rank 2) etc. are used.
OEM products in retail
Special cases in the computer industry
OEM software can differ from the so-called full version ( retail ) by a lower scope of delivery or limited functionality, but sometimes only by a different right of use (with otherwise identical functionality).
In most cases, the sale of OEM software licenses is only legally permitted in connection with hardware . In Germany, such a ban has been declared ineffective by a court for a trader who is not bound by a contract. - OEM versions can usually be upgraded or updated .
- Example 1: The Nero Burning ROM software from the manufacturer Nero for burning CDs and DVDs is sold, for example, in three different OEM versions. The OEM versions are included with CD and DVD burners , but some are also available on the open market at a lower price. Most of the time, when this version comes with burners, it uses a CD-Key that will only work with the burner that came with the software. The functionality is also often limited, so that only the so-called "Express mode" can be used, but not the full user interface.
- Example 2: Microsoft sells significantly cheaper OEM versions of their software (e.g. Office or Windows ) to dealers who then have to deliver the software together with a newly purchased PC ( bundle ). However, these software licenses are associated with fewer or restricted usage rights. Which usage rights are applicable can be found in the respective end user license agreement ( EULA for short ). Here z. For example, it should be noted that the license cannot be downgraded (no older previous version of the program may be installed with the software license purchased) or that reimaging is not allowed (it cannot be transferred from another original data carrier to another License or a different license agreement than the one that was issued with the license).
In other words, a customer pays much less buying a new PC with a pre-installed OEM version than buying the same PC and a normal retail version of the same software separately. Even if he initially only buys the hardware and a short time later the software from the same dealer, he is no longer entitled to the cheaper OEM version. Microsoft calls its OEM versions OSB , which stands for OEM for System Builder or SB (V) ( System Builder (Version) ) . However, the OEM and SB versions only differ slightly in terms of the rights granted.
Recovery CD : Some OEMs label the Windows CDs with the addition "Recovery". These usually have the same scope of performance as an original Windows version and are not only suitable for restoring a system, but can also be used to completely reinstall a PC. (Exception: With older Windows versions, such as Windows ME, it happened that the recovery CDs only contained a hard disk image with completely pre-installed drivers for the respective PC. A new installation on another PC was possible with these versions Recovery CDs are often also sold as OEM CDs because they have the same properties as OEM or SB versions.
However, there are often several limitations with recovery CDs. On the one hand, most CDs have copy protection ; on the other hand, they are usually permanently linked to the supplied PC set and usually carry out a hardware test before installation. Recovery CDs can therefore not be installed on computers from other manufacturers, which is intended to prevent resale. PC manufacturers enjoyed a lot of freedom when programming recovery CDs and were able to provide them with the latest and most suitable drivers, which made installation on the original PC easier. Microsoft encouraged the distribution of recovery CDs with special discounts to prevent unauthorized distribution of the software. Recovery CDs have become rarer since Microsoft product activation was introduced .
According to a judgment of the Federal Court of Justice on July 6, 2000, dealers in Germany are also allowed to sell OEM versions without being tied to hardware. OEM versions can also be purchased without hardware. Microsoft had sued against this practice and lost. This means that OEM versions are legally available separately. Microsoft itself or the distributors sell the system builder versions of Windows and Office only to special Microsoft contractual partners. In corresponding contracts, the System Builder undertakes to install these versions only on new PCs and not to sell them individually. For each individual System Builder version, the dealer must present proof of sales to Microsoft. These contracts were introduced in response to the BGH ruling, and neither are they affected by this ruling, nor are these special system builder versions. Since the layman cannot distinguish between these special system builder versions (OSBs) and “normal” system builder versions ( non-OSB ), purchase is legal, but sale by a Microsoft contractual partner is not.
Another point of contention is converting a recovery CD into a normal Windows CD. From a technical point of view, this is easily possible, since the required files are on the system partition. The procedure is also legal, provided that only “smooth operation is guaranteed”. However, installing the Windows version obtained in this way on multiple PCs or partitions is illegal - just like with a retail version.
This is manufactured for another company, under whose brand name the product is then offered. So-called bulk versions are to be described as OEM products if they are built into a system and sold by a system integrator or value-added reseller (VAR). Strictly speaking, bulk versions that are sold loosely under the name of the real manufacturer are not OEM products, but are often (incorrectly) referred to as such - especially in the IT hardware sector. The retail hardware intended for the end customer market usually differs from the bulk product in that it is more complex in terms of packaging and additional accessories such as cables, screws, (longer) manufacturer's guarantees and other extras. With real OEM hardware, problem support is often not provided by the original manufacturer (OEM) (“no device support”), and the customer then has to rely on the support of his dealer or system integrator .
- Example 1: The manufacturer Asus produces special OEM versions of its mainboards, which are then installed in their PC systems by complete system providers. Often these OEM versions are then modified compared to the retail version, e.g. B. by displaying the logo of the complete system provider at the start or by other housing connections.
- Example 2: The manufacturer Hewlett-Packard sells CD recorders (burners) to end customers , but no longer produces the relevant components itself. Instead, Hewlett-Packard buys OEM drives from Philips , Samsung , LG and Lite-On and builds them in own brand name enclosures. Similar procedures are i.a. a. also common with digital cameras from Medion .
- Example 3: Household appliances such as washing machines and dishwashers of the brands Bosch and Siemens are manufactured by the legally independent company BSH Hausgeräte GmbH, which belongs to Robert Bosch GmbH . BSH Hausgeräte GmbH is therefore an OEM for the products, since they are sold under the brand and manufacturer names Bosch or Siemens and the latter companies are also the primary contact for guarantee (not warranty) and goodwill questions from end customers.
- BGH, judgment of July 6, 2000, I ZR 244/97 - Article at the Institute for Legal Informatics of the Saarland University , of October 13, 2009
- https://www.at-rs.de/beitrag/items/was-ist-eigentlich-ein-oem.html What actually is an OEM?
- Microsoft has to accept defeat in the OEM dispute - article at heise online , July 7, 2000
- Karl M. Popp, Ralf Meyer: Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry . Books on Demand, Norderstedt 2010, ISBN 3-8391-6983-6 .
- Unleashed to a full Windows XP CD with a click of the mouse ( Memento from January 8, 2007 in the Internet Archive )
-  - Forum entry at nickles.de about an OEM board manufactured by Asus