LG Electronics is set to launch a new all-in-one mopping robot vacuum cleaner. This product isn’t solely an LG creation; it was developed in collaboration with Silver Star, a company based in Shenzhen, China, known for its expertise in research, development and manufacturing of robot vacuum cleaners. Silver Star is responsible for the final production, while LG contributed its quality standards, design, and digital technology. This collaboration represents a Joint Development Manufacturing (JDM) approach. An LG Electronics representative explained, “We leveraged the strengths of a specialized manufacturer in robot vacuum development and production, combined with LG Electronics’ quality and design, to create this product. It’s a strategy to enhance our competitiveness in both performance and pricing.”
The methods for producing electronic products are becoming increasingly varied. Beyond the traditional Original Equipment Manufacturing (OEM) model—where a company plans and develops a product and then outsources production—there’s been a shift towards Original Design Manufacturing (ODM), where manufacturers handle everything from technology development to design and production. Now, the industry is moving towards the JDM model, where the original company and the manufacturer jointly develop the technology. This kind of outsourcing, previously limited to non-core or mid-to-low-end products, is now being applied even to premium lines.
Historically, companies like Samsung and LG have relied heavily on the ODM model, with smaller companies in Korea and China developing and producing products. These were then quality-checked and sold under the larger companies’ brands. This method has been particularly prevalent for home appliances like microwaves, air purifiers, dishwashers, and induction cooktops.
Samsung’s use of ODM extends to some of its Galaxy A series smartphones, targeting mid-to-low-end markets in countries like India and Brazil. While the company’s in-house team handles the production of the Galaxy S series and foldable phones, they’ve employed the JDM model for certain Galaxy A series models since 2019. This approach has seen collaboration with Chinese partners like Wingtech, Huaqin, and Longcheer, increasing the share of Samsung’s smartphones produced through JDM from 7% in 2019 to around 20% today. A Samsung representative noted, “Our developers are involved in designing key features and securing essential components like camera modules and semiconductor substrates.”
The shift toward JDM reflects a growing trend in the electronics industry. Unlike ODM, where companies mainly check the quality of received products, JDM involves them from the start, with engineers working alongside the manufacturing partner to ensure software and design standards are met. This method has been adopted for some Galaxy A series lines, previously handled under ODM, now under JDM.
Diversifying production methods has allowed companies like Samsung and LG to save on costs and time. By partnering with technically skilled companies, they can bring products to market faster, especially in response to popular new products from competitors. With Chinese companies rapidly gaining market share through affordable products, JDM offers a strategic advantage, enabling quicker market entry.
