Android OEM vs. ODM: Meaning, Definition, Pros and Cons

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Summary

What is an Android OEM:

  • A company responsible for designing, overseeing the manufacturing process, and selling Android devices.
  • Key Characteristics:
    • They control the design, specifications, and branding of Android devices.
    • They may have in-house manufacturing or contract manufacturers for production but maintain close supervision.
    • Customization of the Android operating system to create unique user experiences is common.

What is an Android ODM:

  • A company outsources the design and manufacturing of a device to an ODM because they lack the time, expertise, or budget to build out the product themselves. ODMs handle the entire process of Android device creation, from design to manufacturing, often including software customization.
  • Key Characteristics:
    • ODMs receive general direction from the client brand but have expertise in design and manufacturing.
    • They may design hardware, ensure functionality, and customize the operating system.
    • Used to quickly produce a wide range of smartphones for various brands.

The key difference between ODM and OEM is that ODMs handle the entire design and manufacturing process, often including software customization, on behalf of other brands, while OEMs retain control over design, specifications, and branding.


If you’re a regular reader of Android news, you may have come across the acronyms ODM and OEM. These manufacturing buzzwords stand for Original Design Manufacturer and Original Equipment Manufacturer, respectively.

Companies like Google, Samsung, Nokia, and Xiaomi follow distinct routes to bring their smartphones to life. Knowing the difference between Android OEMs and ODMs can help you better understand the manufacturing process these smartphones undergo before they are ready for sale.

The Android Universe

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Android is an operating system that powers over 2.5 billion active devices. It has worked its way into becoming a central part of many of our daily lives.

Initially developed by a small team in California, it ran into financial hurdles, leading to a Google acquisition in 2005 for $50 million. Since then, it has grown into a versatile Linux-based OS used in smartphones, tablets, smartwatches, smart TVs, and laptops.

While it uses the Linux kernel and file system, Android goes the extra mile when it comes to security. Android must uphold security standards despite being primarily a mobile phone OS that is continuously online and operated by non-tech-savvy users.

Android devices are manufactured using one of two methods, OEM or ODM; we will explore the differences in this article.

Android OEMs: In-House Manufacturing

Android OEMs, including Google and Samsung, are the brains behind devices running the Android OS. These companies take on the roles of designing, overseeing manufacturing, and selling the devices. The main idea behind OEMs is that the company selling the device has complete control over its design. Not just being limited to smartphones, OEMs extend their Android-powered creations to tablets and various other consumer electronics.

manufacturer

Design choices, such as form factor, screen size, specs, and processors, fall under the jurisdiction of these OEMs. While they don’t always manufacture the devices themselves, they closely supervise the process by partnering with or contracting manufacturers who adhere to their guidelines.

The most significant differentiator for OEMs is they are responsible for design, branding, and distribution efforts. They take Android as the base and tweak it to create unique, personalized experiences. Consider the Google Pixel, which adds exclusive apps and features to the Android foundation, giving it its distinctive identity.

Android ODMs: Outsourcing Manufacturing

On the flip side of the Android manufacturing spectrum, we have Android ODMs. ODMs are manufacturers used by companies that outsource the entire design and manufacturing process to another company. ODMs will receive general direction from the client, but because this client may not have the experience required to build out the product, they hire the ODM to design and manufacture it.

manufacturing

These companies handle the entire process of smartphone creation, from design and manufacturing to software customization. In the realm of budget smartphones, ODMs are widely used. While ODMs offer a quick and cost-effective way to produce phones for the market, their role can have some notable implications for consumers.

Five major ODMs: Huaqin, Wingtech, LongCheer, CNCE, and TINNO, collectively account for 85% of the ODM market share. They’re responsible for creating phones branded and sold by companies like Xiaomi, Oppo, and Huawei.

These ODMs not only design the physical aspects of a phone but also handle manufacturing and software customization. For example, they design the hardware, ensure it works, and even customize the operating system. This allows brands to quickly release a wide range of smartphones without investing extensively in the design and manufacturing process.

To put ODMs’ influence into perspective, consider these stats for 2020:

  • Samsung: 22% of their phones are ODM-designed.
  • Huawei: 18% of their phones come from ODMs.
  • Xiaomi: A remarkable 74% of Xiaomi’s phones are ODM creations.
  • Oppo: Over half (51%) of Oppo’s phones are ODM-made.
  • Lenovo (Motorola): An impressive 89% of Lenovo’s phones, including Motorola, are ODM-designed.

One significant consequence of ODM involvement is its impact on software updates. ODMs often have a significant role in software R&D and customization, meaning that branding companies may not have full control over the operating system. This can lead to issues or delays in delivering software updates.

Pros of Working with ODMs:

  • Speedy Market Entry: ODMs help you get products to market quickly.
  • Cost-Efficiency: They require lower budgets.
  • Expertise: ODMs are pros in manufacturing and design.
  • Lower Labor Costs: Often operate in regions with lower labor costs.
  • Component Access: They have access to a wide range of components.

Cons of Working with ODMs:

  • Limited Customization: Major design changes may not be possible.
  • Shared Services: May not get exclusive attention.
  • Lack of Control: Some aspects of the technology may be proprietary.

Pros of Working with OEMs:

  • IP Ownership: You retain ownership of the product’s intellectual property.
  • Tailored Operations: OEMs adapt to your specifications.

Cons of Working with OEMs:

  • Higher Costs: OEM products require more R&D investment.
  • Time-Consuming: OEM projects often take longer to reach the market compared to ODMs.

Conclusion

Foxconn manufactures products for major companies worldwide. They manufacture an impressive list of devices, including iPhones, Kindles, GameCubes, Google Pixels, and Xbox consoles. Foxconn is estimated to manufacture over 25of all consumer electronics sold worldwide. A company like Foxconn, which is based in China, can take on many roles.

Foxconn, as an OEM, would work closely with Google to create their flagship Google Pixel and tailor it to the specific needs, specifications, and branding goals. Foxconn, as an ODM, would receive an offer from a company like Xiaomi to create a new smartphone and then would take over the design and manufacturing of the device.

With Foxconn having so much experience in the field of manufacturing, there is nothing inherently wrong with using them as an ODM, but handing over the reins to a less reputable ODM could be problematic.