Can an Asus Smartphone Shake Up the Status Quo?

Asus is looking at entering the U.S. smartphone market

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Asustek Computer — or Asus, as it’s better known — has built a reputation for designing quirky computer hardware and mobile devices that would put even Samsung (SSNLF) to shame.

Initially, its smartphone offerings were traditional devices running Google’s (GOOG) Android operating system — you’d have trouble visually differentiating them from any other smartphone of the time. Not content with conformity, Asus has pushed the boundaries in recent years by turning instead to monster 7-inch smartphones (the $300 Fonepad) and models that dock with a display to transform into a tablet (the $1,300 PadFone). If you thought Samsung’s Galaxy Note “phablet” was unusual, it seems downright conservative compared to the mobile gear Asus sells.

But if you want to buy one of those Asus smartphones today, your best option would be eBay (EBAY) since Asus has no U.S. wireless presence.

However, the company is now eying American shores. In an interview with AllThingsD, Asus Chairman Jonney Shih confirmed his company has been hard at work establishing relationships with U.S. wireless carriers and that a 2014 entry is a likely scenario. If Asus launches a smartphone for the U.S. market, does it stand any chance of shaking up the status quo?

Worldwide, the smartphone market is dominated by Samsung and Apple (AAPL). Combined, they ship more than 40% of smartphones, with LG – the third place vendor — barely cracking 5%. In the U.S., the two big players have an even tighter lock on things with Apple selling 39.2% of all smartphones in May, while Samsung accounted for 23%. A recent study highlighted in The Verge shows just how dominant Samsung has become in the Android smartphone space: with more than 100 different models in circulation, the South Korean manufacturer accounts for 47.5% of all Android smartphones in use.

If LG, Sony (SNE), HTC and Google’s own Motorola can’t break Samsung’s stranglehold on Android smartphones — or even combine to knock Apple off its perch in the U.S. — what hope does Asus have of doing so? (Especially considering it will be not only starting from scratch, but coming into a slowing market that’s also being targeted by Chinese manufacturers like ZTE and Huawei.)

I don’t see Asus being much of a threat to Apple. If someone is looking to buy the latest iPhone, they’re generally not even considering Android, Windows or BlackBerry (BBRY) smartphones, so Asus poses no threat there. However, the right device could appeal to consumers who are after something visually different.

But while it’s unlikely to affect Apple, Asus could end up stealing a chunk of Samsung’s business.


Article printed from InvestorPlace Media, http://investorplace.com/2013/07/can-an-asus-smartphone-shake-up-the-status-quo/.

©2014 InvestorPlace Media, LLC

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