ASUS Abandons the Pocket: The End of Zenfone as AI Dominates the Balance Sheet

ASUS is officially hanging up its smartphone ambitions, closing a decade-long chapter of mobile experimentation to chase the "artificial brain." At the company’s 2025 Year-End Gala—held just weeks ago at the Taipei Nangang Exhibition Center—Chairman Jonney Shih confirmed that the tech giant will no longer develop new mobile phone models. This isn’t just a minor restructuring; it’s a total redirection of engineering DNA toward "physical AI," robotics, and the next frontier of wearable hardware.

The announcement marks the end of an era for two distinct cultures: the cult of the compact Zenfone and the high-octane eSports community built around the ROG Phone. While Shih framed the pivot as a "once-in-a-lifetime" opportunity to lead the AI revolution, the move signals that the smartphone market has finally become too rigid for a company that thrives on niche innovation. For current users, the exit won't be immediate—ASUS has promised a "maintenance-first" policy, ensuring software patches and warranty services continue for the final generation of devices.

The Fiscal Reality: AI Servers and the $23 Billion Surge

This retreat from the mobile market isn't a sign of weakness, but a response to overwhelming growth elsewhere. The balance sheet tells a more aggressive story than any press release could: In 2025, ASUS reported record revenue of TWD 738.91 billion (roughly $23.4 billion), a massive 26.1% leap over the previous year.

The engine behind this growth wasn't the handheld in your pocket, but the massive racks in the data center. The AI server division effectively doubled its internal targets in 2025, recording 100% year-on-year growth. With AI infrastructure now accounting for a staggering 20% of total revenue, the decision to cannibalize the smartphone R&D budget to feed high-margin "artificial brain" development was a matter of survival in a shifting landscape. Shih’s vision for the future is no longer about personal screens, but about self-learning systems that require a complete overhaul of the company’s operational focus.

The Blueprint: Beyond the Pocket

ASUS is trading the palm of your hand for the periphery of your life. The "all in AI" strategy focuses on three pillars that the company believes will replace the smartphone’s utility by the end of the decade:

• AI Robotics: Transitioning from consumer electronics to autonomous commercial and industrial units.
• Smart Glasses: A bet on wearable AI and augmented reality as the primary interface for hands-free assistants.
• The ROG Ally Bridge: While the phones are dead, the ROG Ally remains the "elephant in the room." ASUS is keeping its handheld gaming PC lineup alive as the crucial bridge between its traditional hardware dominance and its new mobile-adjacent future.

The 2024 launch of the Zenfone 12 Ultra and the ROG Phone 9 Pro now serves as a final "greatest hits" tour. These devices represented the pinnacle of ASUS’s mobile engineering, yet they couldn't compete with the sheer gravity of the AI shift.

A High-Stakes Gamble for the Republic of Gamers

By abandoning the smartphone, ASUS is walking away from a market it helped define through sheer weirdness—from flipping cameras to side-mounted charging ports. The restructuring of R&D teams is already underway, with mobile engineers being absorbed into the "Physical AI" divisions.

However, this pivot is far from a safe bet; it is a profound gamble. For years, the "Republic of Gamers" brand was anchored by the hardware users touched every day. By pivoting to servers and industrial robotics, ASUS risks losing its "soul" and its direct connection to the consumer enthusiasts who built the brand.

Is the world ready for an ASUS that prioritizes "artificial brains" over the enthusiast hardware that made it a household name? As the company exits the crowded mobile arena to lead the "Fourth Industrial Revolution," it is trading a known—albeit difficult—market for an unproven AI utopia. The smartphone era for ASUS is over; the era of the machine has begun.