In a major shift for the consumer electronics industry, Asus has officially announced its exit from the smartphone business, confirming that it will no longer launch new models under its popular Zenfone and ROG Phone brands. While Asus has struggled for years with a global smartphone market share below 1%, the real reason behind this decision is far more strategic: a sweeping pivot toward Artificial Intelligence (AI) hardware.
Why Asus Is Leaving the Smartphone Market
The announcement was confirmed by Asus Chairman Jonney Shih at the company’s year-end gala on January 16, 2026. According to leadership, the smartphone sector has become increasingly difficult for smaller players due to rising component costs, shrinking profit margins, and overwhelming dominance by Apple, Samsung, and Chinese giants.
In 2025 alone, global RAM shortages pushed LPDDR5X memory prices from around $25 to over $70 per chip, dramatically raising production costs. While large manufacturers can absorb these increases, Asus’s mobile division barely broke even over the past two decades. In contrast, its AI server and enterprise hardware business doubled revenue in 2025 and now accounts for nearly 20% of total company earnings.
Asus’s New Focus: AI Hardware and “Physical AI”
Rather than continuing to compete in smartphones, Asus is redirecting nearly all of its mobile R&D resources into three fast-growing “Physical AI” sectors:
- AI-Powered Robotics – Intelligent machines designed for industrial automation and smart homes.
- AI Smart Glasses – Building on its collaboration with XREAL, Asus plans to compete aggressively in the augmented reality and wearable computing market.
- AI-Enhanced Commercial PCs – Its ExpertBook and Copilot+ PC lines saw over 26% revenue growth in 2025 thanks to on-device AI features.
Asus believes the smartphone era has plateaued, while “ubiquitous AI” artificial intelligence embedded in everyday devices — represents the next major growth cycle.
What Happens to Existing Asus Phone Users?
Current owners of Asus phones such as the Zenfone 12 Ultra or ROG Phone 9 won’t be abandoned. The company has confirmed it will honor all promised software updates, continue warranty support, and maintain service centers for repairs. However, retailers have been instructed not to restock devices once existing inventory sells out.
The End of an Iconic Smartphone Era
This move marks the end of two highly respected product lines. The ROG Phone set industry standards for mobile gaming, while the Zenfone series was one of the last to champion compact flagship designs.
As Asus reinvents itself around AI-driven hardware, its smartphone exit highlights a broader industry shift from traditional mobile devices toward intelligent, AI-powered ecosystems shaping the future of computing.
