No more Asus phones, chairman confirms quitting smartphone market

Key Highlights

• Industry analysts have been warning that manufacturing smartphones is about to get significantly more expensive, thanks to surging costs of AI-capable chips and high-performance memory components. As phone makers race to embed AI features directly into devices, supply chain pressures are expected to drive up production costs and squeeze margins even further. More from Tech Are we all sounding like ChatGPT?
• The creepy reality of an AI-dominated era Elon Musk vs OpenAI: Inside the court showdown over company’s for-profit shiftFor a player like Asus, whose smartphones have always targeted niche segments rather than mass-market volumes, that’s a tough equation. The company seems to have decided it’s better to invest in building AI-powered hardware ecosystems than compete in a market where each new phone costs more to make and sells for less profit. Goodbye smartphones, hello “AI everything”Shih described the pivot as a response to what he called a “paradigm shift” driven by artificial intelligence.
• Asus plans to redirect its smartphone division’s resources into developing “commercial PCs and physical AI devices,” including AI robots, robotics platforms, and even AI glasses. Asus’s decision isn’t entirely surprising.
• Smartphone margins have been razor-thin for years, and even tech giants like LG and HTC bowed out after struggling to stay profitable.
• For Asus, which already has strong footing in PCs, gaming laptops, and components, refocusing on AI-driven devices could be a smarter long-term play. Quick ReadsView AlliPhone 18 Pro leak reveals design changes, new A20 chip, and smarter camera upgradesElon Musk is hiring Indians to teach Grok AI Hindi and Bengali — no experience neededThe end of Zenfone, ROGFor fans of Asus’s compact Zenfone series, this marks the end of an era.