Taiwan's top-two smartphone vendors HTC and Asustek Computer are facing mounting pressure on how to make a turnaround of their beleaguered smartphone business amid increasing competition, according to industry sources.

In the Taiwan market, China-based Oppo outraced HTC to capture fourth position in the smartphone vendor rankings in terms of unit shipment in July, trailing Samsung Electronics, Apple and Asustek.

Furthermore, Oppo's flagship model, Oppo R11, was the top-selling Android-based smartphone in the local market in July, according to data form local retail channels.

HTC revenues hit NT$6.891 billion (US$228.48 million) in June 2017, the highest level so far for the year, thanks to the release of its latest flagship model HTC U11.

However, the sales momentum of the U11 appeared to have waned in July, dragging its revenues to NT$6.19 billion for the month, down 10% on month and 2% on year.

It will become more difficult for HTC in the latter half of the year when the U 11 has been in the market for a while, and other smartphone vendors including Apple, Samsung, LG Electronics, Huawei, Oppo, Xiaomi Technology, will begin rolling out their new flagship models, said the sources.

As a result, it comes as no surprise to the industry on speculations that HTC is currently exploring options that could range from spinning off its VR business to a full sale of the entire company, commented the sources. HTC has declined to comment on market speculations.

Asustek's operations also hit headwinds in the first half of 2017, sending its EPS for the second quarter of the year to a nearly 7-year low of NT$2.70 and forcing it to delay the launch of its next-generation ZenFone 4 family products to August from April set previously.

Asustek also was forced to overhaul its corporate organizations and marketing strategy recently, aiming to improve the efficiency of its management system and time-to-market for new products.

However, it remains to be seen whether the company's new marketing strategy and new corporate structure will work to bring a turnaround of its smartphone business, said the sources.

Asustek has internally lowered its smartphone shipment target for 2017 to 15 million units from 20 million set originally, indicated the sources.