Asustek Computer expects its handset business to start generating profits in September as well as in the fourth quarter of 2014 after being in the handset segment for over 10 years, according to company CEO Jerry Shen.

Rising sales of the company's ZenFone family products in Taiwan and Southeast Asia, and reduced costs in the purchase of components will enable its handset business to turn profitable, Shen said.

Asustek is expected to ship 2.8 million ZenFone-series smartphones in the third quarter of 2014, bringing full-year smartphone shipments to eight million units, according to an industry estimate.

To maintain sales momentum of the ZenFone, Asustek plans to launch a LTE version in China in cooperation with China Mobile in November 2014, and its second-generation ZenFones in cooperation with Intel in January 2015, revealed the sources.

Asustek will pay more attention to ramp up smartphone shipments to China and the US in 2015, with LTE-enabled models to account for over 40% of its total shipments, said the sources.

Asustek aims to ship up to 16-20 million smartphones in 2015, revealed the sources, citing a company internal estimate.

Meanwhile, Asustek has unveiled its first smartwatch, the ZenWatch, at the on-going IFA 2014, to test the market.

In other news, Acer shipped about three million smartphones in the first eight months of 2014 and is expected to ship a total of four million for the year, which will meet its target but still not be profitable, indicated the sources.