Core Insights - ASUS, a veteran mobile phone manufacturer, has announced that it will not launch new smartphones in 2026, confirming the news during its year-end party [3] - The decision to halt new smartphone releases comes after years of poor performance in the mobile market, particularly in comparison to competitors [5] - The smartphone replacement cycle has significantly lengthened, now averaging around 40 months, which has reduced consumer desire to upgrade [7] Group 1 - ASUS will stop producing new models for its ZenFone and ROG Phone brands starting in 2026, but will continue to support existing users [3] - The company has struggled in the mobile market, with its smartphone business described as "bleak" compared to other domestic manufacturers [5] - The gaming smartphone segment, where ASUS previously aimed to compete, has seen significant competition, particularly from brands like Red Magic [5] Group 2 - The average smartphone replacement cycle has increased from 18 months to approximately 40 months, indicating a shift in consumer behavior [7] - Factors contributing to this trend include the overperformance of flagship smartphones and minimal perceived upgrades in camera technology [7] - Increased competitive pressure in the smartphone market has affected smaller manufacturers, leading to consolidations such as OnePlus and Realme returning to OPPO [7]

Core Viewpoint - ASUS will suspend the launch of new smartphones, including ZenFone and ROG Phone, in 2026 due to regular business adjustments and rising component costs, particularly storage prices [1][4][5]. Group 1: Business Adjustments - ASUS confirmed that it will not release new smartphones in 2026, emphasizing that after-sales service and software updates will remain unchanged [1]. - The decision is attributed to significant increases in upstream component costs, making it difficult for ASUS to sustain its smartphone business [1][4]. - Industry insiders speculate that the rising storage prices are a primary factor behind this decision [1][4]. Group 2: Historical Context - ASUS began its mobile journey in 2003 with the launch of the J100 3G flip phone and gained traction with the ZenFone series in 2014, which was well-received in emerging markets [2]. - The ROG Phone series, launched in 2018, positioned ASUS among the top gaming phone brands, but the company has faced challenges due to market saturation and increased competition [2]. - ASUS's smartphone revenue has significantly declined, dropping from 18% in 2016 to approximately 1% in 2023, leading to a strategic focus on the ZenFone and ROG Phone lines [3]. Group 3: Market Conditions - The global smartphone market is experiencing a downturn, with forecasts for 2026 showing reduced shipment volumes, further pressuring manufacturers [5]. - The rising costs of DRAM have increased the bill of materials (BoM) for smartphones by approximately 25% for low-end, 15% for mid-range, and 10% for high-end devices [4]. - ASUS's smartphone shipments are projected to be only in the tens of thousands in 2025, with a significant portion concentrated in the Asia-Pacific region [5]. Group 4: Financial Performance - Despite the challenges in the smartphone sector, ASUS's overall performance remains strong, driven by AI servers and gaming products, with a revenue of 535.98 billion New Taiwan Dollars in the first three quarters of 2025, a 24% year-on-year increase [5]. - However, the rising costs have impacted profitability, with a 9% decline in gross profit year-on-year, leading to a net profit decrease of 16% [5]. Group 5: Future Directions - ASUS is shifting its focus towards AI infrastructure, with plans to enhance its server business, which is approaching 20% of total revenue [6]. - The company is also considering price adjustments for its PC products due to rising storage costs, indicating a broader trend in the industry [7]. - There are rumors about ASUS entering the DRAM manufacturing market to stabilize its supply chain, although the company has denied these claims [7].

Core Viewpoint - ASUS is reportedly planning to exit the smartphone market, with no new smartphone releases planned for 2026, although the mobile division's operations will continue for now [1][2]. Group 1: Historical Context and Market Position - ASUS entered the mobile phone market in 2002, initially focusing on ODM for European operators, but struggled to establish brand recognition [2]. - The company launched its first self-branded phone, the J101, in 2003, marking the beginning of its branding journey [2]. - In 2008, ASUS acquired Garmin's smartphone business to differentiate itself in the market, but this partnership ended unsuccessfully due to the rise of the iPhone [2][3]. Group 2: Product Development and Strategy - ASUS attempted to penetrate the smartphone market with the ZenFone series in 2014, targeting high cost-performance ratios, which gained popularity in emerging markets [3]. - The launch of the ROG gaming phone in 2017 established a dual strategy for ASUS, focusing on mainstream with ZenFone and high-end with ROG [3]. Group 3: Challenges and Decline - After 2018, the smartphone market became increasingly competitive, with Chinese brands like Huawei and Xiaomi dominating [7]. - ASUS faced challenges in both cost-effectiveness and innovation, leading to a slowdown in product iterations and market presence [7]. - The mobile division has been a financial burden, with revenue from mobile devices consistently below 10% of total revenue and ongoing losses [8][9]. Group 4: Future Outlook - ASUS has indicated that the mobile division will see minimal activity by 2025, with a focus shifting back to its core PC business [7]. - The company is expected to concentrate on its main business areas, including AI, cloud computing, and smart ecosystems, while potentially exiting the smartphone market [10]. - ASUS's market share in the global PC market remains low, with the company ranking fifth behind Lenovo, HP, Dell, and Apple [11].