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what is oem

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http://www.webopedia.com/TERM/O/OEM.html
pronounced as separate letters) Short for original equipment manufacturer, which is a misleading term for a company that has a special relationship with computer producers. OEMs buy computers in bulk and customize them for a particular application. They then sell the customized computer under their own name. The term is really a misnomer because OEMs are not the original manufacturers -- they are the customizers.
Contrast with IHV.
 
There are both advantages and disadvantages to having OEM copies of Windows XP. An advantage is initial cost, whereas a disadvantage is lack of support from Microshaft. Recently I lost a copy of Win XP OEM. I still had the license, but no cd. Because it was an OEM copy, Microsoft would not give me a new one. It had to come from the OEM, which in my case had closed down.
 
In hardware terms, it is much the same. OEM you will get basically the part which is sold in bulk. Retail you will get the part just like you had bought it in a store.
 
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