Asus Q3 2013 profit drops by 26%, will focus on smartphones in 2014

At an investor's press conference held yesterday in Taiwan, Asus announced their Q3 2013 financial results.

Asus struck a 26% drop in year-on-year profits due to some one-time tax expenses of NT$1.52 billion (US$51.37 million).

Their net revenue in Q3 2013 was NT$107,079 million. That's 19% more than their revenue back in Q2 2013 (QoQ) and 4% less than their revenue in Q3 2012 (YoY).

As for net profit, they've scored NT$4,940 million, which is 4% more than their last quarter's net profit (QoQ), but some good 26% less than what they earned in net profit in the same quarter a year ago (YoY).

Computers and notebooks represented 57% of their operations in Q3 2013 (3% decrease QoQ), while tablets constitute 20% (6% increase QoQ). Motherboards and video cards business account for 13% of their operations(13% decrease QoQ).

The company's market share in the US has increased, but it has decreased a bit in the other regions in the world.

As for the performance outlook for next quarter, ASUS plans to sell substantially more notebooks, slightly more tablets, but also slightly less motherboards and graphics cards than in Q3.

Asus is still the world's fifth largest PC brand and the world's third largest tablet manufacturer. The latter fact is by all means helped by the fact that the company has been the manufacturer of the Google's Nexus 7 tablet for two generations in a row.

“We remain optimistic about the desktop and laptop market, but our priority is to make the company’s smartphone business turn a profit next year,” Asustek CFO David Chang said at yesterday's investors conference.

"Asus aims to grow its smartphone business from about 1 million units this year to 5 million units next year," added Jerry Shen, Asustek CEO.

The first step in this direction will be the unveiling of new smartphones at the the Consumer Electronics Show (CES) in January 2014, Shen stated.

Judging by this slide from Asus's own conference presentation, we can safely guess that these new smartphones will be released under the MEMOfone brand and will aim to disrupt the market status quo.

Since these are not flagship products we are talking about, we would make another guess that the MEMOfones would be nicely equipped midrange phones at an affordable price point (something along the lines of what Motorola did with its Moto G yesterday).

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