Asustek to add second chip partner to ZenFone 2 series

AsusTEK CEO - Jerry Shen

According to Focustaiwan.tw. Taiwan's Asustek Computer Inc. said Wednesday that it plans to add a second chip supplier for the successor of its low-cost ZenFone range as part of efforts to double its smartphone shipments next year.

Asustek CEO Jerry Shen told the press at an investor conference that the company intends to launch its ZenFone 2 models at the Consumer Electronics Show in the United States in January next year, with a starting price tag of NT$9,990 (US$327).

All of the new phones scheduled for release at the annual trade show will be powered by Intel Corp. chips and will support 4G LTE connectivity, Shen said, adding that LTE-enabled phones will account for about 30 percent-40 percent of Asustek's total smartphone shipments in 2015.

The company estimates that it will ship 8 million smartphones this year and 16 million units next year, as it plans to expand the availability of ZenFones to about 20 markets globally from 14 markets this year, while putting more focus on China and Japan, he added.

To achieve that aggressive shipment target, Shen said, Asustek will team up with a second chip supplier to produce cheaper ZenFone 2 models priced at NT$4,990.

The second-platform ZenFone 2 will include variants that will be launched in January with two major Chinese wireless carriers -- China Mobile Ltd. and China Telecom Corp. -- with some other models designed for the global market, according to Shen, who declined to name the second chip supplier.

The CEO forecast that Asustek's smartphone business will turn profitable for the whole of next year and make up about 15 percent of the company's 2015 full-year revenue.

Asustek reported that day third-quarter net income of NT$5.81 billion (US$190 million), the highest level of the past six quarters, due in part to better-than-expected shipments of smartphones.

The company shipped 2.8 million smartphones during the third quarter, beating its previous target of 2.6 million units.

Shares of Asustek closed down 0.16 percent at NT$319.50 Wednesday in Taipei before the company's earnings announcement.