We have been quite dedicated to the ASUS brand over the years. They have built a brand that is/was well known for great products and prices that the competition couldn’t match. But in recent years, increased competition in the mobile phone business and a dwindling PC market has taken a toll on the company. Revenues have been slowly sliding downward and ASUS has taken their lumps in pursuit of becoming a player in the global mobile phone market. Given the recent difficulties, news this week that ASUS CEO Jerry Shen is resigning doesn’t come as a huge surprise. Shen is out at the end of December 2018 but will lead a new company iFast (AIoT) which will be partially funded by ASUS.
ASUS will now be going with a dual CEO structure with Sy Hsu (from PC division) and Samson Hu (from customer care services) taking over the helm. Given the state of the company and the 6.2 billion in losses for the mobile phone division restructure, it’s going to be a tough job to get things back on track for this new leadership duo.
The departing Jerry Shen, along with Jonney Shih (chairman) were the founding fathers of the ASUS brand. Reducing their roles in the company is a natural progression as they get older, but it does put a big question mark for the future. What happens to the innovation and risk taking that was a staple of the ASUS brand? The Transformer Pad and Padfone are a couple examples of innovation and let’s not forget about the Eee PC that was the driving force behind the entire netbook category.
Cheap price points were synonymous with ASUS, but over the past number of years this has been changing. There has been a shift towards high margin products and this will likely be a priority moving forward. Case in point is the announcement by ASUS saying their mobile phone strategy moving forward will be the ROG Phone and power users. Seems like cheaper mobile phone offerings will be no more. Will this strategy go beyond just the mobile phone business?
ASUS is heading into troubling waters. The motherboard business globally is shrinking. The gaming market is strong, but ROG is about to face stiff competition as more manufactures go there to cash in as well. ASUS is doing a major restructure to their mobile phone division and they will end up with a very niche and lean product line. Their tablet offerings have all but dried up and perhaps that product line-up will see the axe. It’s almost two years since there has been a ZenPad release which seems like writing on the wall for the tablet division.
It’s going to be interesting to see how ASUS fares because they have become so heavily dependant on ROG. The gaming market is headed for extreme competition which will only make things harder if this is their main revenue source. The company is quite aware of this situation and they seem to have a solid strategy in place for maintaining their gaming market dominance.
Let’s hope a bright future for Jerry Shen with his new venture iFast. No question he would have preferred passing off the reigns under better circumstances, but with major restructuring taking place this was the right time. This new chapter for ASUS is going to be a big test for the company but hopefully they don’t abandon innovative products with consumer friendly price points.