The argument against outsourcing product design is that doing so gives the EMS subcontractor the experience to juimp into the market with their own branded products, thus competing with the OEM customer. EMS and ODMs, of course, dispute such intentions.
Well, one major Taiwanese ODM appears to have overreached. As noted today Sony is shifting notebooks production from Asustek to Foxconn. Reason: It’s not stated, but Asustek has bolstered its own presence in the notebook market, and is competing in some areas with its customer.
This is not to paint with a broad brush, but it is something to consider as EMS players such as Sanmina-SCI, Flextronics and others increasingly bring their own designs to market.