ASUS Pulls Back From Smartphones, Redirects Resources to AI PCs, Servers, and “Physical AI” Devices
ASUS is effectively hitting pause on new smartphone launches as it shifts engineering and product priorities toward AI-focused hardware—including AI servers, commercial PCs, and what it describes as “Physical AI” devices.
Speaking to the media ahead of the company’s year-end celebration on January 16, ASUS Chairman Jonney Shih said ASUS will not add new smartphone models going forward, explaining that the goal is to allocate R&D resources more appropriately toward areas he views as critical to the next major technology transition.
A portfolio reset amid an “All in AI” push
Shih framed AI as the core of a new platform cycle, what he called a “fourth industrial revolution” and said ASUS intends to fully execute an “All in AI” strategy. In practical terms, the company plans to integrate AI across product lines spanning cloud infrastructure to edge devices, targeting both work and everyday-use scenarios.
While ASUS did not use the words “exit” or “shutdown,” the statement signals a clear strategic pullback from smartphones, a category where ASUS has maintained strong brand recognition (particularly in gaming) but limited scale compared to the largest global phone makers.
AI servers and business PCs positioned as key growth drivers
Shih acknowledged the PC market outlook remains soft, but pointed to gaming, AI servers, and commercial PCs as the company’s main growth engines. There will be some slowdown in this segment due to the ongoing memory shortage but, ASUS expects AI server revenue to ramp quickly, citing a goal of 100% growth off a relatively low base.
Component inflation could reshape pricing
Shih also addressed near-term cost pressure from memory shortages and rising prices, noting that the current environment is creating real strain on products outside the AI segment.
He said price increases are one possible lever, while emphasizing ASUS is working across product planning, sales mix, and supply chain coordination to preserve value language that typically points to tighter SKU planning, configuration adjustments, and selective pricing moves depending on category.
A nod to open-source AI momentum
On the global AI race, Shih referenced China-based open-source models such as DeepSeek, describing their progress under compute constraints as evidence the industry is reaching a turning point. His broader view: the market is heading toward an ecosystem filled with “artificial brains” of many sizes, systems capable of self-learning and adapting, which he believes will drive a major shift in how computing products are designed and used.
What it means for ASUS
For ASUS, deprioritizing smartphones aligns with a long-standing strength: building differentiated systems where tight integration and hardware engineering matter most—PCs, gaming gear, and increasingly enterprise infrastructure. The company’s latest messaging suggests it sees AI as the next demand driver across that stack, from servers to endpoints.
In the near term, the market will be watching for clearer definitions of ASUS’s “Physical AI” roadmap, how aggressively it scales AI server offerings, and whether component pricing pressure leads to broader price adjustments across non-AI products.
