A great deal of consumers are not familiar with the concept of original equipment manufacturer (OEM) computer hardware, yet as an increasing number of people look for ways to save money, OEM hardware is likely to become a wonderful option for bargain hunters. OEM hardware can save individuals up to 30 percent when compared with retail hardware, however, in reality, it’s not a sensible option for everyone.

OEM hardware is, basically, hardware components that are sold directly by a hardware manufacturer without having the product packaging, branding, manuals, and cables that come with retail hardware. Having less expensive retail packaging allows OEMs to provide hardware at a lower price as compared to what is normally charged for retail versions, and generally, there is no big difference between OEM and retail versions of the hardware component. OEM hardware is generally sold to smaller value added retailers who get these discounted brand name hardware components and have them installed in custom systems which are then sold to consumers.

To put it a lot more clearly, assume Small Retailer wishes to build and then sell a custom computer system. Small Retailer is not a manufacturer of computer components, and so they will need to buy the hardware and software from somebody who does manufacture them. Regrettably, if Small Retailer purchases the full retail version of every computer component, the resulting computer system will be too costly to be competitive in the market. For that reason, Small Retailer enters into an agreement with Big Manufacturer to purchase OEM components devoid of retail packaging at a substantial cost reduction, which permits them to build a computer system which will be competitive price-wise in the market.

While OEM hardware is generally designed for these value added retailers, consumers do have the option for buying OEM hardware for themselves at a similar discount. Even though this is certainly not encouraged by many manufacturers, it’s completely legal; everyone can purchase OEM hardware.

Well before consumers take out their wallets, however, it is important to understand some key differences between OEM and retail hardware. Although it may sound like an attractive option (who wants all of that packaging anyway?), it is definitely not for everybody: A number of OEM products have shorter warranties. Because OEM hardware is meant to be sold to value added retailers, there is generally an understanding that Small Retailer, not the manufacturer, is going to be providing technical support for that component. In the event that consumers buy OEM hardware for themselves, they will probably be providing support for themselves.

OEM hardware is not a wise decision for individuals who are not familiar with computer hardware components and the way they function, considering the fact that OEM hardware includes no manuals, no instructions, and numerous times no cables.

When it comes down to it, for users with at least moderate understanding of computer systems, OEM hardware can certainly be a smart purchase. Since there shouldn’t be real physical differences between the OEM and retail versions, users who are comfortable with no frills and little support can help to save lots of money by buying OEM. For newer users or people that want the peace of mind that comes with extended warranties and technical support, retail is the better option.

The creator of this article, Matt, works with Dell in their OEM program. This program concentrates on OEM solutions, server appliances and customized hardware intended for medium to large sized businesses.

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Computer Hardware & Accessories