What is an OEM?
An original equipment manufacturer, frequently abbreviated OEM is a company that builds products or components that are used in products sold by another company often called a value-added re-seller or VAR (See below). An OEM will typically build to order based on designs of the VAR.
In some usages, a VAR is sometimes called an OEM, despite this being a complete reversal of the literal meaning of both terms. This confusion arises from use of the term OEM as a verb: for example, a VAR might say that they are going to OEM a new product, meaning they are going to offer a new product based on components from an OEM.
Some OEMs have also taken on a larger role in the design of the product they are manufacturing. The term Original Design Manufacturer (ODM) is used to describe companies that design and manufacture a product that is then sold under other brand names and does not necessarily acknowledge the Original Design Manufacturer brand.
A value-added re-seller (VAR) is a company that adds some feature to an existing product,then sells it (usually to end-users) as a new package.
This value can come from professional services such as integrating, customizing, consulting, training and implementation. The value can also be added by developing a specific application for the product designed for the customer’s needs which is then resold as a new package.
Definitions from http://en.wikipedia.org