Asus Is Done Making Phones & Is Shifting Focus to AI Instead

A rumor becomes reality

Earlier this month, reports surfaced claiming Asus was preparing to scale back or pause smartphone development entirely. At the time, the company declined to comment. Now, with Shih’s public remarks, the pause has moved from rumor to confirmed strategy.

Shih framed the move as an “indefinite wait and see” approach rather than a permanent shutdown. Still, history suggests these pauses rarely end in a comeback. Asus did not outline any conditions under which it might resume phone development, and instead emphasized where its attention is headed next.

That future, according to Shih, revolves around AI-driven products. Asus plans to focus more heavily on AI servers, robotics, and smart glasses, areas where the company is already seeing significant growth. This direction was also reflected at CES earlier this month, where Asus showed off dual screen laptops and gaming focused wearables, but no new smartphones.

What happens to Zenfone and ROG Phone?

For most phone buyers, the disappearance of Asus from the smartphone market will barely register. Asus phones have not been mainstream hits for years. Still, the company leaves behind two product lines that filled very specific niches.

The Zenfone series built a reputation as one of the last compact Android flagships. While most competitors leaned into larger screens and heavier designs, Zenfone models appealed to users who wanted something smaller, faster, and relatively affordable. Over time, though, the line lost its identity. Later models grew larger, pricing crept up, and Asus never matched competitors on long term software support.

The ROG Phone line was more distinctive. It targeted mobile gamers who wanted hardware that made no compromises. Features like active cooling, shoulder trigger buttons, oversized batteries, top tier speakers, and gaming accessories set it apart from standard flagships. Asus even held onto things others abandoned, including headphone jacks and multiple USB C ports.

The problem was price and scale. The latest ROG Phone 9 Pro launched at around $1,200, putting it above many flagship models from Samsung and Apple. The audience willing to pay that much for a gaming focused phone turned out to be very small.

Existing phones will still be supported

Asus says current Zenfone and ROG Phone owners will continue to receive software updates and warranty support. That is important, especially given the premium prices of recent models.

That said, Asus was never a leader in this area. The ROG Phone 9 Pro is guaranteed only two Android version updates and five years of security patches. Recent Zenfone models receive two OS upgrades and four years of security updates. By comparison, Samsung and Google now offer up to seven years of updates on some models.

In a market where people keep phones longer than ever, that gap mattered.

Why leaving phones makes business sense

Asus’s decision fits into a broader industry trend. Smartphones are no longer the fast moving, high growth category they were a decade ago. Annual upgrades have slowed, hardware improvements are incremental, and prices keep climbing.

At the same time, competition has intensified. Chinese manufacturers like Vivo, Xiaomi, and Huawei continue to flood the market with aggressively priced devices. For smaller or niche focused brands, it has become increasingly difficult to justify the cost of designing, manufacturing, and supporting a new phone every year.

Asus has been here before. In the early days of Android, the company experimented freely, releasing tablets, hybrid devices, and phones with unusual form factors. Back then, the market rewarded experimentation. Today, it punishes inefficiency.

This is not the first time a manufacturer has walked away. LG followed a similar path, gradually scaling back before shutting down its mobile division entirely. No Android brand that has paused smartphone development has successfully returned at scale.

Asus is betting on AI instead

From Asus’s perspective, the timing makes sense. During the same event where Shih confirmed the smartphone pause, he also revealed that Asus posted a 26.1 percent revenue increase in 2025. Much of that growth came from a surge in AI server sales, which reportedly doubled year over year.

Rather than continue pouring resources into a low margin smartphone business, Asus is leaning into areas where demand and profitability are stronger. That includes AI infrastructure, enterprise hardware, and experimental consumer tech like smart glasses.

For Asus, walking away from phones is not a retreat. It is a reallocation.

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