Depends on your margins. Companies like Enigma (used them, happy, not affiliated in any way) can do turnkey manufacturing and take away the supply chain/procurement headaches. OTOH, if you can handle procurement and manufacturing internally, or co-ordinate multiple vendors and do final assembly in house, you can save cash (if everything goes perfectly).
I have tried to go the in-house route as well, and got KILLED on procurement. Without existing relationships, I had multi-month leadtimes on a lot of parts. Again, YMMV.
Ideally I think in house would be the approach I'd take. The device in question isn't particularly complicated and the components don't exactly have to be top of the line. I have no experience working with vendors though.
Enigma: http://www.enigmacorp.com/ was good to me, YMMV.
I have tried to go the in-house route as well, and got KILLED on procurement. Without existing relationships, I had multi-month leadtimes on a lot of parts. Again, YMMV.