Branding and the ODM/OEM dilemma

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At a recent mobile Monday event in Taipei, founder and CTO of Puno Systems John Williamson discussed the general structure of how the contract manufacturer-ODM-OEM-distributor value chain works for PDAs and Smartphones, touching on the dilemma over branding and other factors affecting the mobile distribution channel.
Williamson, who was previously CTO at i-mate for eight years and has worked with and evaluated most of the PDA vendors in Taiwan.

He spoke about what it means for manufacturers now that end users are expecting to get their phones on contract for “free,” and the difficulties caused by the subsidization paradigm. He also brought up the issue of branding, explaining how important it was suddenly becoming to manufacturers – take HTC for example.
“You need a good brand, a strong brand, to be able to differentiate yourself,” posited Williamson who said HTC had been very successful at turning itself from simply an ODM into an OEM.
Williamson also touched on the thorny issue of Android (“the new big thing”) and the whole Google/Nexus branding fiasco. Asking who owned the branding for the Nexus, HTC or Google, Williamson pointed out that neither firm knew, causing customer confusion.

To make branding matters even more complicated, Williamson also discussed how many operators were also starting to take on a much greater role in terms of the actual device, and that many were really stepping up and starting to “own the device” in terms of branding as well as services. Several operators, said Williamson, were even coming out with their own handsets and working directly with manufacturers.