The business of branding offers richer rewards than the traditional model of low-cost manufacturing
What's in a name? It may say Dell or Hewlett-Packard on the outside, but chances are the components inside your computer or other electronics device was made in Taiwan or - increasingly - the mainland.
It is a way of doing business long utilised by Greater China hi-tech manufacturers: Make electronics cheaply and leave the sales, marketing and distribution to the American and European brand-name giants.
Under the original-equipment manufacturing (OEM) model, companies such as IDT International produce electronics while their customers get the glory.
But IDT is no longer content with anonymity and has become one of the few Asian companies to start its own brand. After two decades as an OEM and original-equipment design (ODM) producer, IDT is moving into the branded business - where the margins are bigger - with its Oregon Scientific marque.
'The living space for OEM/ODM is shrinking,' Trade Development Council deputy chairman Frederic Lam said. 'Companies have to distinguish themselves by developing their own brands.'
Investors appear to support the move. Since May 7, IDT shares have climbed 16.46 per cent, closing at 92 cents yesterday.
