Asus sets its sights on a top 10 spot in the smartphone market

Asus chairman Jonney Shih thinks the company will be able to more than triple last year's shipments and break into the phone-making elite.

Aloysius Low Senior Editor
Aloysius Low is a Senior Editor at CNET covering mobile and Asia. Based in Singapore, he loves playing Dota 2 when he can spare the time and is also the owner-minion of two adorable cats.
Aloysius Low
4 min read

Watch this: Asus adds a variety of new designs with the ZenWatch 2
Asus chairman Jonney Shih speaking at his company's pre-Computex keynote in Taiwan. Seamus Byrne/CNET

TAIPEI -- Asus chairman Jonney Shih -- an engaging speaker here ahead of the Computex trade show -- has ambitious plans in the smartphone business, despite being "a little bit late" to the market.

Its latest effort is a phone designed for taking selfies, called the ZenFone Selfie , announced alongside a range of 8-inch ZenPad tablets, a beautiful new all-in-one PC and a new version of its smartwatch, the ZenWatch 2 .

"This year our goal is to try to get into the worldwide top 10," Shih said in an interview. "Our internal goal is a lot more aggressive, but for the public figures, we aim to achieve 25 million phone shipments. Last year, we hit 8 million."

Those figures are a tiny fraction of the numbers shipped by giants such as Samsung, with 318 million phones in 2014, and Apple, which shipped 193 million, according to analyst firm International Data Corporation (IDC). Nevertheless, there's a significant drop off after those two companies, with number five LG shipping fewer than 60 million devices. And Shih believes his company has cracked the code to enter that exclusive club.

"We have been driving the performance milestone, but we have also been internalising the practice of design thinking for around eight years, and that started from the Eee PC. It's not just talking about the gigahertz of the CPU, the RAM and what sort of bandwidth, but more about the desirability of a product first," he said.

Latching onto trends is also something Shih believes will help Asus sell truckloads of phones. The Asus chairman pointed out the current trend of unlocked phones being a key driver in phone sales in more established markets such as the US and Japan, and claims the company's ZenFone 2 is one of the top five unlocked phones sold on Amazon.

Asus was originally known for its hardware PC components and laptops, but after the success of the Eee PC -- the original netbook which made its debut in 2007 at Computex -- the company made the decision to venture into the mobile smartphone market in 2009 with a partnership with Garmin. The partnership didn't last long. In 2011, Asus started production of its own handsets powered by Google's Android software.

Under the leadership of Shih and Asus CEO Jerry Shen, who keeps a lower media profile, the company hasn't shied away from more esoteric designs. The PadFone stands out -- a phone that could convert into a tablet when it was slotted into a larger screen. A few sequels appeared, but Asus has declined to update it this year.

"For the PadFone, we launched it when we weren't in the mainstream competition, so we tried to cut in with the innovation aspect," Shih said.

"But with mobile phones becoming more mainstream, we don't have enough time to just do something like the PadFone for innovation, we need to become mainstream and aim for big volume, and that's why, starting in 2014, that was a different journey for Asus."

PadFone X offers two mobile devices in one (pictures)

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But there's a reason for this and while you may not see any new PadFones for now, Shih says it may return in the future, though when it does appear, it's likely to be a higher-end offering.

"One of Asus' biggest strengths is its design chops. But I can't help but think of similarities with Samsung and wonder if hardware alone is enough," said Bryan Ma, IDC's vice president for the Asia Pacific client devices research group.

"There's no doubt that Asus have very impressive engineering skills, and have proven time and again how they can think outside the box," Ma added. "The company is also one of the more progressive OEMs when it comes to hardware design, but the question is whether that will be enough?"

Instead of looking at the mostly plastic hardware of its phones -- Shih believes it's better than metal for smartphones -- Asus has turned to its software to make its case to potential customers. Each smartphone and tablet comes with a custom interface called Zen UI, on top of Android, which loads all sorts of features, many of them of dubious usefulness. If anything, the number of features can be overwhelming -- making the experience anything but zen-like.

Data provided by IDC shows Asus is currently in 18th place in the global smartphone shipments market, but if the company can execute its strategy properly, it seems likely to break into the coveted top 10. The company is looking at Asian markets such as India, Indonesia and China as key battlegrounds this year, though it will need to make a truly global impact if it's going to take the next step and break into the top five.