Another major company exits the smartphone market

Author | Huang Yu Editor | Zhou Zhiyu At the beginning of 2026, at ASUS’s year-end gala, ASUS Group Chairman Shih Chung-tang’s statement officially put an end to the PC giant’s nearly 23-year journey in the mobile phone business. Shih candidly stated that from 2026 onwards, ASUS Zenfone and ROG Phone dual brands will stop releasing new models, with no new phones to be launched. He indicated that ASUS’s purpose is to allocate R&D resources more rationally and focus on PCs and various physical AI devices and other key areas. With the rapid advancement of technology, many phone brands have fallen behind or withdrawn—overseas there are Nokia, BlackBerry, Ericsson, LG, Siemens, Sharp, etc.; domestically, companies like Meitu Mobile, Amoi, Gionee, Smartisan, LeEco Mobile. As competition in the stock smartphone market intensifies, survival becomes harder for small and medium-sized manufacturers. ASUS was not the first to exit, and it will not be the last. ASUS’s journey in mobile phones was not insignificant; on the contrary, it left many distinct marks in the history of the industry. Established in 1989, ASUS began with manufacturing motherboards and computer hardware. As early as 2003, in the era of feature phones, ASUS launched its first branded phone, the J101, which could elegantly rotate like a swan when upright, earning it the nickname “Swan Phone” among users. Although it didn’t make much of a splash, it marked the official beginning of the ASUS phone branding journey. In 2014, ASUS went all out to enter the smartphone market, and the ZenFone series swept through Asia and Europe with a cost-effective strategy, becoming a strong competitor in the mid-range market. In 2015, ASUS had a highlight moment in the mobile market, releasing the world’s first smartphone with 4GB of memory, the ZenFone 2, sparking a trend for large memory. Partnering with carriers, ASUS launched the Pegasus series, emphasizing long battery life and a convenient desktop. That year, ASUS shipped 20.5 million phones, ranking first in Taiwan and among the top globally. Three years later, ASUS launched the ROG Phone, becoming a pioneer in the gaming phone category. Thus, ASUS mobile phones established a “ZenFone” mainstream and “ROG Phone” gaming dual-line strategy. Despite some performance in niche markets, ASUS’s phone business revenue share declined year by year (about 18% in 2016, only 1% in 2023), and it never achieved profitability, gradually being marginalized in the mainstream market. In Q4 of 2018, ASUS recorded over NT$6.2 billion in losses from its mobile department, causing a significant drop in overall profit that year. According to IDC, in 2025, ASUS’s annual phone shipments were only in the tens of thousands, with half concentrated in the Asia-Pacific region. What does "tens of thousands" mean? As a comparison, last year, China’s fifth-ranked OPPO shipped over 40 million units. ASUS’s exit from the phone business is the inevitable result of long-term market pressures, cost stress, and strategic focus shifting. Industry insiders believe that the surge in global storage chip prices in 2025 might have been the last straw. Driven by global memory chip production cuts and soaring demand for AI servers, RAM prices skyrocketed. According to market research firm Counterpoint Research, DRAM price hikes raised BOM costs for low, mid, and high-end smartphones by about 25%, 15%, and 10%, respectively. The average cost impact is expected to last at 10%-15% until Q2 2026. Counterpoint Research Senior Analyst Yang Wang pointed out that at lower price points, there is limited room for phone prices to rise, and if costs cannot be fully passed on, OEMs may adjust product strategies. Recently, the market has seen trimmed shipments of some low-SKU models. Meanwhile, institutions such as Counterpoint Research and IDC have generally downgraded 2026 global and China smartphone market shipment forecasts, further increasing operational pressure on manufacturers. With the global smartphone market entering its second half, the entire market has shifted from growth to stock, and users’ replacement cycles are becoming longer, leaving less room for small and medium-sized phone brands. In the future, the mobile market will exhibit a new pattern of “stable leaders + cross-industry innovation.” Those who can’t keep pace with the industry’s rhythm or lack core competitiveness will eventually be swept away by the tides of time. ASUS’s choice is both a rational strategic adjustment and a wake-up call for the entire industry: in the second half of the stock competition, only those who proactively adapt and focus on core strengths can stand firm during the reshuffling, otherwise, exit is the only outcome. 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