In January this year, reports emerged that ASUS would exit the phone market and lay off staff in its phone division. ASUS subsequently responded publicly, stating that it had no plans to launch new smartphones this year, but that the operations of its phone business unit would remain unchanged. However, recent supply chain reports indicate that ASUS phone inventory was essentially sold out in the fourth quarter.

Inventory cleared to zero with no new phones to 'take the baton' — this seems to declare the brand's death.

The 'last straw' that crushed ASUS phones was the sharp rise in memory chip prices. As upstream cost increases pushed phone prices up across the board, more and more consumers were no longer willing to pay for niche brands, preferring instead to direct their purchase budgets toward leading mainstream models. Meanwhile, with rising costs and shrinking profits, niche phone brands that were barely making money were pushed to the edge of survival.

Waiting for death, exiting the market — perhaps this is the ending they have no choice but to accept after years of struggle.

The 'Death List'

Around 2019, domestic niche phone brands experienced a brutal 'bloodbath':

After Gionee's implosion, it collapsed within a year, with total liabilities at bankruptcy reaching nearly 21.1 billion yuan; Meitu posted a farewell letter on Weibo, announcing that its Meitu phone brand was fully licensed to Xiaomi Group; Smartisan Technology, after being taken over by ByteDance, changed its legal representative, with all core members exiting, and 'idealist' Luo Yonghao departing the phone industry; 360's phone business was rumored to be suspended — the official response was merely a postponement, but no new phones have appeared since.

At the time, competition was intensely fierce, the leading landscape had already taken initial shape, and other phone brands, seeing no hope of 'getting a seat at the table,' chose to fold their cards.

This year, another round of purging has arrived — but this may be the last one.

In February, two days after news spread that its phone business had stalled, Meizu finally responded, stating it would suspend domestic new phone R&D and undergo strategic transformation. Before the business suspension news, Meizu had actually already canceled the launch plan for the 22 Air, and with the Meizu 23 not being released to the market, this already meant that the former 'king of phones' had entered its death countdown and was about to disappear from public view.

As a company founded 23 years ago, Meizu's development has been full of ups and downs. It started with brilliance, but strategic missteps later blurred its brand identity and sales declined. Then the founder returned, leadership fell out, new phones failed to turn the tide, and the brand survived on nostalgia alone until it was taken over by Geely.

Three years ago, Geely acquired Meizu and established Xingji Meizu Group, which was once seen as Meizu's new starting point. Then-chairman and CEO Shen Ziyu set a goal: to return to the top five in China's mid-to-high-end market within three years. However, three years later, Meizu's role remains awkward — it not only failed to achieve its original ambition but was thoroughly abandoned.

ASUS phones have also had a rough couple of years. In the 'value-for-money' battlefield, the ZenFone series struggled to shake mainland brands' 'phone sea tactics' and extreme cost control; in the 'innovation' battlefield, it could not invest R&D resources comparable to giants in frontier areas like imaging and foldable screens. As a result, product iteration slowed and market presence grew increasingly faint.

In fact, since last year, there has been little new activity on the phone line internally, and now that inventory is cleared, ASUS phone's retreat is almost inevitable.

Also officially concluding this year was former gaming phone 'king' Black Shark. In June, Black Shark released an announcement on Black Shark community server upgrades and service migration, stating that the Black Shark community would temporarily suspend access due to server upgrades; in July, Nanchang Black Shark Technology's technical support engineer 'Black Shark Xirui' announced that due to deep business structure adjustments, official after-sales repair and related services for the phone category would cease.

Black Shark's last phone launch was in 2022, and the Black Shark 6, originally planned for 2023, was stillborn after its teaser campaign. In the past few years, Black Shark has not launched new phones, and user attention has dwindled, so its end barely caused ripples in the market.

In the gaming phone segment, only RedMagic remains as the lone survivor, and across the entire smartphone market, apart from those backed by major manufacturers, niche brands are basically nearly extinct.

The Fatal Blow

The smaller the smartphone pie, the more the market concentrates toward the top.

According to IDC data, in the 2025 China smartphone shipment rankings, Huawei ranked first with 46.7 million units, followed by Apple and vivo with 46.2 million and 46.1 million units respectively, while Xiaomi and OPPO occupied the remaining positions. The data also shows that these five manufacturers accounted for 79.4% of China's overall smartphone market share in 2025, indicating a trend of increasing market concentration.

The same is true in other markets. In North America, for example, Apple has long been the undisputed king, and its market share has trended upward in recent years. According to data, in Q1 2022, Apple shipped 19.9 million smartphones with a 51% market share; by Q4 2025, Apple had captured 69% market share, a historic high.

As consumers concentrate on leading brands, the market left for niche brands naturally shrinks further. Especially for niche phones that grew in segmented market soil — when leading brands fill their gaps, max out performance, and turn to attack their turf, they have almost no ability to resist.

The decline of ASUS, Black Shark, and Legion is exactly this — the original gaming phone market has basically been eaten up by major manufacturers.

Of course, niche phone brands might have hoped to survive on nostalgia and a loyal fan base while slowly seeking new opportunities, but this hope was thoroughly shattered by the upstream supply chain.

Since last year, memory chip supply has tightened and prices have soared. Major manufacturers can spread costs across tens of millions of units in shipments, while niche manufacturers have no bargaining power in the supply chain — they cannot get preferential prices, and may not even be able to get goods at all. An employee at a leading smart hardware company said, 'There's word in the industry that small manufacturers simply can't get memory now, big manufacturers can only buy at a premium, and downstream products have to raise prices accordingly.'

Moreover, niche phone brands are mostly concentrated in the mid-to-low-end market, where profits were already thin. With memory costs soaring, the phone business is not profitable and has become a loss-making endeavor.

IDC estimates that memory costs for low-end models have risen from 10%–15% in the past to 40%–50%; Omdia's estimate is even higher, with this proportion exceeding 64% for models under $99. The further downstream, the weaker the ability to pass on costs — niche phone makers like Meizu and ASUS are even less able to absorb costs through scale.

It's not just niche phone brands — even large-scale leading manufacturers have been pushed into peril. The most typical example is Transsion, which, in order to stockpile chips, has been 'digging into its own pockets' while borrowing money, putting enormous pressure on the company's cash flow. Financial reports show that in the first three quarters of this year, net cash flow from operating activities expanded from less than 5.9 billion yuan in the first half to nearly 9.9 billion yuan, compared with a net inflow of 3.285 billion yuan in the same period last year.

Stockpiling chips cannot truly reduce costs — it only slows the pace of cost increases, essentially trading cash and inventory risk for a cost time lag. If Transsion cannot complete price increases and product structure adjustments within the time window bought by 'chip stockpiling,' it is very likely to be crushed.

Protecting the Core Business Is the Real Priority

The memory chip storm has swept not only the phone industry but also the PC market. For a PC, nearly 40% of the cost is consumed by memory and hard drives, pushing up whole-device prices and greatly suppressing replacement demand. Clearly, memory's squeeze on the PC market has evolved from a cost issue into a structural contradiction.

ASUS's position in the PC market has always been somewhat awkward. On the rankings, the top three have long been occupied by Lenovo, HP, and Dell, Apple stands out with its closed ecosystem, and ASUS relies on gaming laptops to support its market. And as the renowned leader in the motherboard market, affected by the AI wave, the PC motherboard market is undergoing systemic shrinkage, and ASUS's business is inevitably declining.

According to DIGITIMES' latest report, in 2026, shipments from the world's four major consumer PC motherboard manufacturers — ASUS, Gigabyte, MSI, and ASRock — are expected to shrink by 28% overall, a total reduction of about 11.7 million units. Among them, ASUS shipped 15 million motherboards in 2025, but in the first half of 2026 it managed to ship only just over 5 million, and for the full year it is expected to barely hold the 10 million mark, a year-on-year plunge of 33%. The only consolation is that the AI server business is growing rapidly, becoming a new driver of performance.

Against this backdrop, for ASUS, the phone business seems even more of a burden. Compared with its core business, phone revenue has long accounted for less than 10%, and the business has been loss-making year after year, never achieving stable profitability. In 2018, Chairman Jonney Shih admitted the phone business had failed, and that year's financial report recorded a one-time loss of about NT$6.2 billion (approximately 1.36 billion yuan) due to restructuring of the business.

Abandoning an unprofitable phone business and focusing on the core business has become ASUS's most realistic choice.

Looking back at the development history of China's phone industry, niche phones can be said to be the 'products' left over from the fierce market battles of the past. Those that survived for years mainly relied on or were backed by hardware giants or internet majors. But when giants or major companies generally entered an era of 'just getting by,' maintaining core businesses became far more important than using phone businesses to continue 'holding a position' in mobile — especially now that niche phones have almost no room to survive.

Lenovo's situation is very similar to ASUS's. Although Lenovo's AI phones have achieved growth, they fall into the 'Others' category in global smartphone rankings, with weak presence in the mass consumer market and only a certain volume in some overseas local markets. Its AIoT product line is broad, but so far no national-level hit product has emerged.

The explosion of computing power business cannot hide the reality of its uneven development in consumer hardware.

Cut loose or hold on? As the memory storm sweeps across the entire phone industry, this question has clearly become more urgent. Currently, ASUS and Meizu (Geely) have made their choices, Lenovo may be watching and waiting, and ZTE has already begun to act. Just a few days ago, reports emerged that ZTE is in talks with a major internet company about phone business cooperation, with a plan involving packaging ZTE's phone business.

Growth, glory, turning point, decline — although all niche phone brands are now playing the prelude to their finale, they have also left a vivid mark in the history of domestic phone development.

Leaving with a graceful exit may already be the best ending.