According to Chinese publication CNBeta, ASUS has informed its distribution channels that it will no longer launch new tablets, Android or otherwise. The Taiwanese tech firm’s decision to discontinue its tablet lineup is likely a part of its strategy to focus its marketing and development resources on its flagship ZenFone handset lineup and the ROG (Republic of Gamers) Phone series.
Aside from intense competition from larger manufacturers like Samsung, Huawei, and Apple, the overall tablet market has been facing sales pressure from larger-screened smartphones. Also, most of the Android tablets sold to consumers are low-end devices, which have considerably smaller profit margins compared to more expensive devices. Moreover, Google’s lack of support for Android tablets in favor of Chrome OS-powered devices may also hurt the sales of Android tablets.
Furthermore, the development of foldable smartphones is another threat that could further reduce the sales of tablets. These handsets offer similar display sizes compared to tablets while also giving the portability provided by smartphones. However, it may take some time before foldable smartphones take over the tablet segment due to the high cost and low adoption rate of these devices.
Despite ASUS’ withdrawal from the Android tablet segment, the Taiwanese tech firm is still developing smartphones that cater to power users and gamers. A recent report shows that ASUS will launch the ZenFone 6 series in Valencia, Spain on May 14th, and at least one of the handsets will likely sport the Snapdragon 855 chipset, the current flagship semiconductor offering of Qualcomm. While there is limited information about the handset’s design, there is a possibility that the device will feature a slider mechanism for the front-facing camera, which allows the smartphone to feature a near bezel-less design.
Another handset that ASUS will reportedly launch soon is an updated version of ROG Phone. Industry insiders claim that the Taiwanese tech firm will announce the device in the third quarter of 2019. To further improve the sales of its products, the company inked a partnership with Tencent, a Chinese tech giant that holds a stake in the development of popular mobile games like Fortnite, PUBG, and the mobile version of Call of Duty.
These two handsets belong to the premium segment of the smartphone market. While smartphones in this segment sell in considerably fewer quantities compared to low-end handsets, premium devices tend to have higher profit margins. Given that the smartphone division of ASUS has been losing money, focusing on products with higher margins may help return the unit to profitability, which should consequently improve the financial standing of the Taiwanese tech firm.
Meanwhile, focusing on gaming smartphone market will allow the company to dominate in a niche segment of overall handset sales, which may still result in millions of handsets sold. However, recent developments involving ASUS’ competitors in the gaming smartphone market raise questions about the feasibility of the Taiwanese handset maker’s plans.