Challenging times for Asus phone business according to recent Digitimes article

We’ve always looked at Digitimes as being a reliable source of information for the Asian markets, especially when it comes to Asus. With a lot of technology manufacturing coming out of Asia, Digitimes generally has their hand on the pulse of what’s going on.

So far, we heard of challenges for Asus regarding the new Snapdragon 835 for the Zenfone 4. Asus is not at the level of some top manufacturers and and in line behind the other brands which means waiting a few extra months to get inventory of the new processors. That situation has Asus looking hard at MediaTek although there has been no further updates. Asus has already released numerous Zenfone 3 models with MediaTek processors so it wouldn’t be surprising to see the same when it comes to the Zenfone 4 models. We believe it’s the top end Zenfone 4 models that are being considered for MediaTek processors, although in our opinion Asus will opt for Snapdragon processors and just deal with the delays.

Asus has a long history in the motherboard, laptop and other related products but the smartphone business is ultimately new territory. As it turns out it has been very unforgiving.

With Apple look to OLED panels for their next smartphone plus many other phone manufacturers looking for the same panels, it’s put Asus in a challenging position of trying to find alternate sources. There appears not enough to go around. Sourcing materials takes time which again put release dates back further.

Chinese phone manufacturers have been entering a number of markets in which Asus has been focusing on. The result is increased competition and difficulty to expand sales. Many of the Chinese phones are low priced and with Asus turning to a slightly more expensive price point strategy with the Zenfone 3 (and with Zenfone 4 according to Jerry Shen at the most recent investors conference) which isn’t helping sell more units.

As we’ve been reading recently, the challenge is that without sales volume part become more expensive to acquire. Additionally, without sales it affects bargaining position when it comes to securing up supply of high demand phone components. Asus ultimately needs more smartphone sales in order to get better deals and better supply reliability. Sales don’t come easy in highly competitive businesses such as the phone business.

Asus is set to release their Zenfone 3 Zoom and the much talked about Zenfone AR. With those two models, a delay for the Zenfone 4 will be less impactful. At this point it’s hard to say just how bad the processor and OLED display shortages are and whether those could alter the Computex 2017 event. I’m sure Asus can showcase their new Zenfone 4 at Computex 2017 but it’s the release date which will be impacted.

Stay tuned, things are getting interesting here with the Zenfone 4 launch. We got it covered for you!

[source: Digitimes]


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