Original Equipment Manufacturer
Originally this term was used to name companies that bought PC hardware parts in large quantities to build their own computers.
The part manufacturer usually offers two versions of their components to the market: OEM, which is targeted to companies that build PCs, so the components aren’t sold in fancy boxes and don’t come with detailed manuals, thus making this kind of component cheaper; and retail (or “in-a-box” or “boxed”), which are targeted to end users, coming in a fancy box and with a better-looking manual, thus more expensive than their OEM counterparts.
In several cases the quantity of products bought is large enough to allow the original manufacturer to print the brand of the company that is buying the products or even manufacture an exclusive model for that company.
Some real examples. Eurone and Amptron buy motherboards from ECS/PCChips and sell under their own brand. In this case, Eurone and Amptron are classified as OEM companies, while the original manufacturer (ECS/PCChips) is classified as IHV (Independent Hardware Vendor).
The term OEM is largely used by us even though its name is not correct, since an OEM company, contrary to what OEM stands for, isn’t the real manufacturer of a piece of equipment; OEM companies build equipments using parts manufactured by other companies.
