That's according to sources from the company's supply chain, who indicated the device has performed worse than expected since becoming the last Android Wear device to launch before the February update.
The whispers indicate that shipments of the ZenWatch family products from the supply chain currently average around just 5,000-6,000 units a month. They also suggest that Asus has outsourced the production of the ZenWatch 3 to Pegatron — one of its former offspring companies. This comes after the price tag for the ZenWatch 3 was recently snipped too.
While weak sales are cited as the reason for the company's apparent decision, it's also interesting to examine the rest of the backdrop. Both the Zenwatch 2 and ZenWatch 3 are finally in the crosshairs for the Android Wear 2.0 update, but the slow adoption, combined with these rumours, hints that there's dwindling confidence in the platform.
After all, Asus wouldn't be the only traditional tech company to run away from Android Wear. Sony doesn't appear to be planning a SmartWatch 4, Motorola is showing zero signs of getting back into the smartwatch game and Huawei's top brass have been saying they aren't really sure what smartwatches are for. And don't forget Samsung, which has been using its own Tizen software to run the show for some time.
Still, it's always smart to take rumours like this with a helping of salt, too. While it's entirely possible Asus is on the cusp of ditching the ZenWatch line, this could mean it is simply shaking up its smartwatch strategy. As with most noise of this nature, you can expect to hear more over the coming weeks and months.