Good afternoon, dear reader.
did you think, why is Xiaomi so cheap with its quality and performance? If yes, the answer is in this article.
Xiaomi company. Outsourcing
Outsourcing – is the transfer by an organization of certain types or functions of production activities to another company. Or more simply, division of labor.
However, There are two types of outsourcing.
OEM
The first one is called OEM, или Original Equipment Manufacturer. In translation “Original Equipment Manufacturer”. This is a type of outsourcing., in which the device is developed by the company, or brand, and the manufacturer is another organization. Thus, the brand saves on production capacity. And that’s it, what is his task – is the development of new devices. This type of outsourcing is used by Apple.
ODM
But the second type of outsourcing is used by Xiaomi. ODM, или Original Design Manufacturer. In translation “Original Design Manufacturer”. This is a type of outsourcing., under which the brand (Xiaomi) not only does not manufacture devices, but also development in principle. The company simply places an order for the development and manufacture of a new device. In this case, the manufacturer assumes all responsibility for the device.. This is quality control, and responsibility for marriage. However, Quality control can be made according to customer’s standards. Thus, the brand is not involved in the development and production of the device, but simply sticks his prototype and makes a small margin on his product. It is beneficial in terms of cost, since you do not need to pay for the maintenance of the staff of your engineers and spend resources on development, how does the same Apple.
Share of Xiaomi smartphone production by ODM 75% percent. Primarily, this is a line of budget smartphones Redmi.