ASUS Chairman Jonney Shih officially confirmed on January 16, 2026, that the company will cease developing new smartphone models, ending production of the Zenfone and ROG Phone lineups. Speaking at ASUS’s year-end gala in Taipei, Shih stated the company will redirect all research and development resources toward AI-driven hardware, including robotics, smart glasses, and commercial PC systems labeled as “physical AI.”

Complete Strategic Pivot from Smartphones to AI Innovation

The announcement marks ASUS going “all in AI” after struggling to scale its smartphone business against dominant competitors with larger ecosystems and stronger pricing power. Despite critical recognition for compact Zenfone models and performance-focused ROG Phones, the mobile division failed to deliver consistent profitability in an increasingly competitive and margin-driven market.

ASUS Focus Shift	From	To
Product Development	Zenfone & ROG Phone	AI robots, smart glasses, commercial PCs
Revenue Impact	Smartphones (minimal market share)	AI servers (now 20% of revenue)
R&D Direction	Mobile innovation	Physical AI technologies
Market Position	Niche gaming/compact phones	Fourth Industrial Revolution leadership
User Support	Continuing indefinitely	After-sales, warranties, software updates

Existing Device Support Continues Despite Production Halt

ASUS pledged to maintain after-sales service, warranty coverage, and software updates for at least two more years on existing models like the Zenfone 12 Ultra and ROG Phone 9. This commitment prevents immediate obsolescence and mirrors strategies by other brands gracefully exiting the smartphone market, ensuring customer loyalty during the transition.

The gaming phone niche created by ROG Phone models now faces consolidation, with enthusiasts likely turning to alternatives like Red Magic series or Samsung Galaxy S devices with enhanced gaming modes. For compact phone lovers, options dwindle further following Apple’s iPhone mini discontinuation and minimal Android manufacturer focus on smaller form factors.

ASUS’s smartphone division, while never its primary revenue driver, contributed to brand visibility. The company estimates reallocating hundreds of millions annually toward AI initiatives, where AI servers already generate 20% of revenue with rapid growth trajectories. This aligns with global tech shifts transforming everything from consumer gadgets to enterprise solutions.

The strategic pivot positions ASUS to capitalize on high-growth AI sectors rather than competing in a maturing smartphone market with plateauing global shipments around 1.2 billion units annually. Chairman Shih frames this not as retreat but as forward-looking strategy to lead what the company calls the Fourth Industrial Revolution through advanced physical AI technologies.

Learn more at ASUS official site and explore smartphone industry developments reshaping the competitive landscape.