Rita Deutschbein Managing Editor

August 29, 2023, 8:10 am | Read time: 4 minutes

There has been a lot of movement in the smartphone market this year. Due to patent disputes, manufacturers such as OnePlus, Vivo, and Oppo had to withdraw from Germany. As a result, the selection of manufacturers and devices has significantly shrunk. And it could become even smaller soon, as another company reportedly plans to exit its smartphone division, according to an internal letter. However, the reasons for this are different.

Asus reportedly discontinues ZenFone division

The discussion is about Asus and its ZenFone series. Since 2014, the manufacturer has regularly launched new smartphones under this brand, often attracting attention with unique features or a special form factor. For instance, models like the Asus ZenFone 6 and 7 featured a flip camera, while devices from the ZenFone 8 onward were particularly compact. This year, Asus released another of these very small smartphones. The ZenFone 10 has a display diagonal of just 5.9 inches, making it appear tiny compared to models from other manufacturers.

However, it seems Asus overestimated the demand for compact smartphones. Additionally, there have been other market changes that have affected other manufacturers as well. Some have weathered the past COVID years and high inflation better than others. In general, many components, infrastructure, and labor costs have become more expensive, which consumers are noticing.

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New direction at Asus

At Asus, these developments seem to have more drastic consequences than just a price increase. At least, that’s what internal documents that have come to light suggest. The company is reportedly radically restructuring its core divisions and announced this restructuring internally as early as June. Initially, this concerned the PC division, where the manufacturer is particularly active and has a good reputation. As TechNews Taiwan reports, Asus informed its employees about the adjustments in an internal letter and has since laid off a number of them or reassigned them to other departments.

After the PC division, the smartphone department is now reportedly being addressed, as revealed by the internal letter. In this area, Asus has so far pursued two strategies. On one hand, there is the ZenFone division for conventional everyday smartphones, and on the other, the ROG division (Republic of Gamers) for gamers. The latter is to be continued as the sole pillar in this area. The ZenFone division, however, is to be closed, and the team redistributed to other departments, including the ROG division. According to the letter, there will be no new compact smartphones in the ZenFone series. The internal letter describes the ZenFone 10 as “the last generation of this series.”

However, these details have not yet been confirmed, so we have asked Asus for the current status. Due to the reporting, Asus has released an official statement. Here, the manufacturer refutes the rumors:

We want to counter the rumor that the Asus ZenFone 10 will be the last generation of the series and that the Asus ZenFone product line will be discontinued. This is not true. We will continue our two main product lines of the phone business, the ROG Phone and the ZenFone. Asus has a strong commitment to its smartphone business and its customers. For more information, please refer to our Q2 Earnings Call.

Statement from Asus

What’s next for Asus?

Currently, the situation is not clear-cut. On one hand, there are internal documents confirming the restructuring. Since this has been ongoing for a while, we know from the PC division that Asus has indeed closed areas, moved employees to other departments, and even laid off staff. On the other hand, Asus denies the published plans for its smartphone lines. Whether everything will continue as before remains to be seen.

For users of a ZenFone smartphone, the discontinuation of the division would have no directly noticeable effects. Asus continues to sell its devices, including the ZenFone 10, in its store and through other electronics retailers. The development also does not change the update policy. However, this has often been criticized in the past, as the manufacturer is not known for promptly and widely providing its smartphones with new Android versions.

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With the end of the ZenFone division at Asus, the selection of Android devices would further shrink. The biggest players in this area remain Samsung, Xiaomi, and Google with the Pixel smartphones. Here, buyers can find both high-end devices and more affordable mid-range models. Motorola, Honor, and Nokia also offer Android smartphones, but they no longer have as much influence.