Handset ODMs

Traditional handset vendors outsource development and manufacturing, operators engage in design and ODMs (Original Design Manufacturing) start living their own life. What does it mean to the industry? This paper describes the “ODM phenomenon” and its potential impact on the handset industry, as we know it. Development, manufacturing, and branding of mobile phones have changed over the recent years. An increased number of handsets are developed by ODMs, a phenomenon that has started to twist the mobile value chain. “Traditional” manufacturers increasingly turn to sub-suppliers to minimize risks and efforts in the process of maintaining and expanding their product portfolios. Northstream’s market projections indicate that ODM products will account for more than 40% of the mobile handsets’ market in 2005. Given this development, many questions arise on positions, changes and revenue streams in the mobile value chain. Also, the increased interest from operators to be more intensely involved in handset requirements, designs and branding further fuels the fire.