Because of weaker than expected demand in the Asia Pacific market, the smartphone industry is entering a new era of competition and smartphone ASPs are dropping. Asustek Computer has announced it will reduce its revenue target for the second quarter, down from NT$95-100 billion (US$2.93-3.09 billion) to NT$90-95 billion.

For the third quarter, Asustek is planning to launch new high-end smartphones and notebooks to increase its product ASPs and will enhance its operating efficiency by optimizing its resource allocation.

Despite a reduction in revenue forecast for the second quarter, Asustek still expects its operating profit margin to stay between 4-4.5%.

In February, Asustek reduced its smartphone shipment goal for 2016 to 25 million units, down from 30 million because of delays of its ZenFone 3 launch and weakening worldwide smartphone demand.

Asustek had better-than-expected notebook shipment performance and a 14% share in the worldwide notebook market in the first quarter. The company's notebook shipments in the first half are expected to reach about the same level as that of the first half of 2015, a rather stable performance compared to the worldwide notebook market's nearly 10% on-year decline during the same period.

With PC demand from China and Southeast Asia growing weak, Asustek currently has low visibility over the next couple of quarters, but the company is still expected to perform stably as competition from fellow notebook competitors is also weakening.