Sir, Even though we are good in IT sector, why we import china /goods/machinaries? in what why they are ahead than us?

Hardware contract manufacturing (HCM) plays a major role in IT hardware Industry. HCM can be understood as a form of outsourcing the manufacturing and/or design part of the product development process by a hardware company while it retains the brand name. When a company offers both design and manufacturing services to a brand owner, it is called an Original Equipment Manufacturer (OEM). But if the company only manufactures products, it is called as an Original Design Manufacturer (ODM). As in other forms of business outsourcing, organizations adopt HCM to save costs, to streamline operations or simply as a strategic decision to gradually move away from low value added mechanistic manufacturing processes to concentrate on operations providing more value to their customers. In a wafer-thin margin computer hardware industry, cost cutting can be of paramount importance to company’s very survival in the market place. Besides, reduced financial exposure for promoting a new product is another incentive for OEMs to adopt such model while ODMs get a cushion by working for many brand-name manufactures simultaneously. For example, Taiwan based OEM Quanta Computer makes Apple’s iPod as well as world’s major laptop manufacturer for HP and Dell. A few concentrated ODMs also corner increasingly huge supplier power to themselves as far as OEMs are concerned. There is also an inherent danger of ODMs moving up the value chain thus directly competing with the OEMs in the marketplace with better systems integration capabilities, a favorable learning curve and unique product designs as Foxconn and Quanta, both Taiwan based OEMs, have shown. Nonetheless being nimbler, constantly striving for achieving cost leadership in the Industry and being receptive to customer needs is the way to survive for every player in this Industry. Not surprisingly, most of the world’s leading hardware manufacturers such as Dell, IBM, HP, Acer and Lenovo utilize ODM services extensively and during the ongoing recession this process has only accelerated. Some of the world’s major ODMs are Quanta Computer, FoxConn and Wistron mainly located in Malaysia, Taiwan and China. For example, Quanta Computer is a Taiwan based manufacturer of notebooks and its client list includes Acer, Alienware, Apple, Cisco, Compaq, Dell, Fujitsu, Gateway, HP, Lenovo, Sony, Sun Microsystems and Toshiba! Within the context of Indian IT Industry, the prohibitive cost of IT equipments has been one of the reasons for low IT penetration in the country. As the costs of IT equipments have a downward slope, reliance on increased volumes remains only way for IT equipment manufactures to achieve their sales growth targets.