We’ve sat on this story for a week or so contemplating whether to mention it or not. We did a follow-up with the article reporter and they did reply with additional information. On that basis, we do believe that it’s accurate. It’s also worth noting that the article was written prior to the India unveil of the ZenFone Max Pro M1 which is highly relevant to this discussion.
The article in question relies on insider sources from Asus which paints a picture of the status of the ZenFone business. From an executive and strategic standpoint, this is a high stakes business. There are a lot of aggressive mobile phone companies and it has been a challenging path for Asus. If you’re curious about the level of concern, consider the fact that the search box on Asus.com has had “ZenFone 4” and “ZenFone 5” auto filled. That should say something and give this story some added credibility.
Essentially the sources suggest that this next period of time in 2018/19 is a make or break for the ZenFone brand. We did ask the source if they are referring to just the India market or the global market. They told us this is about the global market.
The mobile phone business for Asus needs to see a turn around with this generation of models or it appears to be over. Remember what really happened here. Asus really showed up hot and heavy with the ZenFone 2 series which made use of Intel processors. Sure Asus did have a number of earlier ZenFone releases prior to ZenFone 2, but it was the ZenFone 2 that really showed a new found approach by Asus.
Part of that ZenFone 2 buzz and success was based on a cheap price point. In subsequent releases, the cheap price point was a thing of the past. Consumers assumed incorrectly that the ZenFone 3 would follow in the footsteps of the ZenFone 2 price points and a lot of consumer negativity ensued. Things didn’t improve price wise with the ZenFone 4 either. Obviously the sales suffered and this is why things are at a critical stage right now with the ZenFone brand.
Things are not so bleak from our vantage point. The ZenFone 5 price unveils have happened and based on feedback, comments and overall web reactions, Asus is going to do just fine. If sales are what Asus needs, it appears that the ZenFone 5 Max Pro M1 and ZenFone 5z are going to perform better than their best case scenario.
There are still challenges even with the outpouring of enthusiasm over these new models. First, the competition is going to respond because in places like India and Asia, Chinese phone brands have dominated and likely will fight to keep their positions. Secondly, the question is whether Asus is going to be able to maintain inventory levels to meet the demand. These two factors could counter the positives of the excellent value/cost proposition of the ZenFone 5 and ZenFone Max Pro M1.
Asus needs to avoid this.
So what if all the excitement exhibited online doesn’t translate into ZenFone sales? Asus will still manufacture phones, but according to the article, those will not bear ZenFone branding. They will instead be manufactured for specific carriers and will have the carrier’s branding instead. In other words, the ZenFone branding will cease to exist in that situation should it comes to that.
Can we put much faith in unnamed sources? Considering we’ve been on the pulse of the ZenFone releases from year to year, we would suggest there is something to this story. Certainly we concur that things haven’t been going swimmingly for the ZenFone series the past couple of years. However, price is king and the ZenFone 5z and ZenFone Max Pro M1 have created a buzz and interest more than any other ZenFone releases to date. On that note, we believe the concerns are squashed. But again, it’s going to take execution of having units available for consumers otherwise all of the positives could be washed away rather quickly.
So right now, we are watching inventory and stock levels. Asus needs to ensure enough supply to meet the demand because all the other boxes are ticked for a successful year. If the ZenFone brand dies, so do we. Obviously we’re hoping for the best while trying to be neutral and calling things as we see them!
[source: techpp.com]
