Asus has decided to stop developing new smartphones in 2026 as it shifts its focus toward artificial intelligence projects. The company is redirecting resources away from its handset business to support emerging technologies described as “Physical AI.” These efforts include work on smart glasses, robotics, and related hardware.
Asus chairman Jonny Shih confirmed that the company will continue to observe the smartphone market. However, he said the smartphone unit will be reassigned to help accelerate AI-related initiatives. The change reflects a broader strategic shift toward areas where Asus sees stronger growth potential.
The move comes as Asus’ AI server business shows rapid expansion. According to a report by Economic Times, revenue from the company’s AI server division doubled in 2025. That unit now contributes roughly 20 percent of Asus’ total earnings. The performance highlights the growing importance of AI infrastructure within the company’s portfolio.
Asus has previously maintained a presence in the smartphone market through specialized devices. The company is best known for its ROG Phone lineup, which targets mobile gaming users. These devices include features such as shoulder trigger buttons, high-performance hardware, and enhanced audio systems. The phones are designed for a niche audience rather than the mass market.
Despite this focus, Asus’ smartphone operations face increasing pressure. Rising memory chip prices have raised production costs across the handset industry. Analysts have identified these higher component costs as a significant challenge for smartphone vendors during the current year. This has made profitability harder to sustain for companies without large-scale smartphone volumes.
By shifting away from new smartphone development, Asus aims to reallocate engineering and financial resources. The company’s attention is now centered on AI-driven hardware products that combine computing with physical interaction. These projects align with broader industry trends toward robotics, wearables, and intelligent systems.
Asus’ decision does not completely rule out future smartphone activity. Company leadership has stated it will continue monitoring market conditions. For now, the priority is supporting AI platforms and infrastructure that are already generating stronger revenue growth.
The change marks a significant adjustment in Asus’ product strategy as it concentrates on AI-focused hardware and emerging technology segments.
