Original Design Manufacturing (ODM): A Global Strategic Business Report
San Jose, CA (PRWEB) May 03, 2012
Follow us on LinkedIn – With the global business environment becoming more competitive than ever, ability of companies to manufacture cheaper yet superior quality products at faster rates is now increasingly critical to success and survival in the marketplace. Agility has become an important strategic factor in competition and companies are faced with the challenge of continuously increasing their manufacturing prowess. In this regard mutually beneficial and synergistic manufacturing partnerships between Original Equipment Manufacturers (OEMs), Original Design Manufacturers (ODMs), Original Brand Manufacturers (OBMs), and contract manufacturers, are one the rise. Given that continuous innovation in product design and development is a necessity, OEM & ODM partnerships are on the rise. Numerous advantages, such as, improved lead times, access to broader design experience (architecture design, mechanical and electrical engineering), flexible system to accommodate design changes/modifications, among others, are encouraging OEMs to gravitate towards ODMs.
Shrinking product lifecycles, faster lead times, modularization of key enabling technologies, waxing competition and pricing pressures have and will continue to drive demand for ODM services. Outsourcing of product design and development activities has been most pronounced in the electronics industry where the technical ability to use hardware configurations/design to differentiate products in the marketplace has reached a saturation point. This is primarily because ODM services are best suited for “Commodity” design and manufacturing, since a commoditized market characterized by high volume homogeneous products offers maximum gains for division of labor. In the upcoming years, strong growth opportunities in digital consumer electronics are poised to drive growth in the ODM market, supported by a dire need for new product form factors. Flat Panel Displays (FPDs) including LCDs currently represent lucrative market for ODMs. Demand in this market is supported by fast expanding application possibilities of FPDs. Rising levels of competition in the FPD market with the influx of new OEMs has brought prices under pressure thus providing new significance to the competitive capabilities of ODMs in this space.
Lower labor and manufacturing costs have, over the decades, resulted in the emergence of increasing number of ODMs in developing low cost countries. Developing countries like Taiwan, Korea, Thailand, Hong Kong and China, among others have long been hubs for low cost product design and manufacturing. However, undertones in the market point to the emergence of change. Unlike the hitherto prevailing trend where ODM service providers focused on the establishment of low-cost facilities in developing Asian countries in order to offer production cost benefits for their customers, the new trend rising in popularity and importance is OEM preference for regionalization, which is inducing ODMs to relocate closer to OEMs. A key factor cited to drive the trend includes obstacles encountered in effective management of remote supply sources. While low cost continues to remain a decisive factor, OEMs are increasingly searching for ODM services, which are non cross-hemispheric. Another key emerging trend is the increased use of ODM services by OEMs to tap into low cost product markets in emerging countries. Picking a generic ODM designed product off-the-shelf and marketing the same under their own brands, allow OEMs to focus time, resources and expertise on premium products higher up in the price structure. ODM services as a case-in-point is flourishing in the Ultra Low Cost Phones/Handsets (ULCH) market, driven by the growing clout and expertise of ODMs in designing and producing low-cost, high volume products.
The ODM market in Europe remains nervous over the play out of the sovereign debt crisis drama, as any falloff in OEM demand will likely impact the market for ODM services. While nothing remains certain and the potential outcomes of the crisis remain numerous, Europe remains a wildcard with the economic health of the region forecast to be the sum of the solutions adopted to resolve the crisis. Despite the challenges and uncertainties, most market indicators for the immediate-term future feature a largely positive outlook. Manufacturing production which continued to recover from 2010 through 2011 is expected to continue into the year 2012. Current economic data that leaves room for hope include Germany’s relative resilience in handling the euro zone crisis, which is helping strengthen confidence levels. For instance, in Germany industrial/manufacturing output is holding well as indicated by the country’s yet strong export market, a key reason for the country’s superior handling of its debt crisis in comparison with Greece, Portugal, Spain and Italy. The recovery in industrial output posted by Germany in the month of January 2012, which breached industry forecasts, additionally infuses confidence in sporting the optimistic outlook. Although EU’s weaker peripheral nations like Greece, Portugal, Spain, and Italy are recording fluctuating industrial production data, overall industrial production in Europe continues to hold up even in the face of weaker than expected growth and optimism remains with no major downgrade in the production outlook. For instance, industrial production in the Euro area (EA17) and EU27 rose by 0.2% in the month of January 2012.
As stated by the new market research report on Original Design Manufacturing, ODM Services in the Electronic Peripherals Industry is poised to emerge into one of the fastest growing markets trailing at a CAGR of 5.7% over the analysis period.
Major players in the marketplace include Arima Group, Compal Electronics Inc., Elitegroup Computer Systems Co. Ltd., Flextronics International Ltd., Foxconn Electronics Inc., Inventec Corporation, Lite-On Technology Corporation, MiTAC International Corp., One & Co, Qisda Corporation, Quanta Computer Incorporated, Sanmina-SCI Corp, Venture Corporation Limited, Wistron Corporation, among others.
The research report titled “Original Design Manufacturing (ODM): A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, and key strategic industry activities. The report analyzes the global ODM market by key end-use sectors such as Computers, Consumer Devices, Electronic Peripherals, Telecommunication Equipment, Networking Equipment, and Servers & Storage Equipment among others. Market estimates and projections are presented for all major geographic markets including North America, Japan, Europe, Asia-Pacific (China, Taiwan, & Rest of Asia-Pacific), and Rest of World.
For more details about this comprehensive market research report, please visit –
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