What is the difference between OEM and Retail Boxed products?

One of the most common questions asked at DirectDeals.com is "What does OEM mean?"? So, this week's blog will answer that question.

The term "OEM" means Original Equipment Manufacturer. This term is used in the computer industry to describe any person or company that deals with or installs new equipment or software on computer equipment. While that might seem a little confusing, I will do my best to clarify.

Almost every part on a computer has a retail boxed version as well as an OEM version. Every manufacturer who creates computer parts has at least these 2 versions they sell in the marketplace. They do this for many reasons, so let’s discuss a few of them.

Retail Boxed products are those products you see on the shelf at companies like BESTBUY, FRYS, and WALMART. They are usually in colorful boxes with lots of information telling you why their version of this product is the best on the market. This type of product is designed to compete side by side with competitor's products. Most manufacturers will support their retail boxed products from pre-sales support to installation and post-installation warranty periods. The costs of this type of advertising as well as the customer support and the technical assistance that may be required to support these products normally cause them to be higher in price.

Now let’s compare "OEM" products. OEM products are in many cases the EXACT SAME product as their retail boxed versions. OEM products are normally purchased by distributors, sub-distributors, and system builders in bulk boxes of 3, 5, 10, 30, 50, and 1oo pieces at a time. The packaging is very compact and the product usually does not come with manuals or instructions on installation or pre-installation settings. This is why there is a suggestion that you be somewhat familiar or technically savvy with computers when using OEM products. The manufacturer does not provide free installation support for OEM products, however, paid support is almost always offered. Because there are usually no manuals or instructions, OEM products can seem a little intimidating to some, but the cost savings usually outweigh the fear associated with using them. The internet is a wealth of information when it comes to the installation and technical support of any product. Many people who use OEM products rely on this information to resolve the rare issues that arise when installing any OEM product. OEM products are handled exactly the same as their retail boxed products. They are installed in the exact same fashion.

OEM software has a few licensing issues that need to be discussed. Most software manufacturers produce OEM products. OEM software works exactly the same as its retail boxed counterparts. OEM software does not come with free installation or technical support from the manufacturer just like the hardware discussed earlier, however, now we are dealing with intellectual property and licensing. OEM software products are considered "married" to the machines they are initially installed on. This means that in most cases, the OEM software cannot be transferred or installed on another machine without purchasing a second copy of the product. In the case of Microsoft products, they require that the Certificate of Authenticity or COA be removed from the software packaging and stuck on the computer itself, symbolically joining the software to that computer. This also makes it very hard to remove the sticker and place it on another computer. The End User License Agreement covers all use and restrictions on software products. You should read the EULA prior to installing the product onto your computer to see if you agree with the licensing restrictions imposed by the computer manufacturers.

DirectDeals.com is always happy to answer any questions you may have. Just leave us a message on this blog or contact us directly at customerservice@directdeals.com.