Smartphone price increases have been widely predicted for months, but 2026 is now shaping up to be the year these warnings become reality. Analysts, leaks and supply chain reports have all suggested that this year will be uniquely bold and worrisome for phone buyers.
Now Nothing CEO Carl Pei has laid out why smartphone prices are rising and why there may be no easy way out of it. In a long post
“For fifteen years, the smartphone industry relied on a single, reliable assumption: Components would inevitably become cheaper,” he wrote. This assumption has finally collapsed, according to Pei, due to a sharp and unprecedented increase in storage costs.
Why memory is suddenly the biggest problem
Pei explains that AI has completely changed the demand for memory chips. The same memory used in smartphones is now crucial for AI data centers, and hyperscalers are securing silicon wafer capacity years in advance. “For the first time, smartphones are competing directly with AI infrastructure,” he said, and RAM prices are rising quickly as a result.
In some cases, Pei claims that storage costs have already increased threefold and further increases are expected. He points out that memory modules that cost less than $20 a year ago could cost $100 for premium phones by the end of 2026. This shift forces phone makers to make an uncomfortable choice: either increase prices by 30% or more or downgrade specs.
We’re already seeing signs of this across the industry, from reports warning that your next Galaxy smartphone could cost more to analysis showing how rising storage costs could directly impact your next smartphone purchase from a different brand.
This isn’t just a smartphone problem. All products that rely heavily on memory are affected. There is already price pressure on laptops and PCs. RAM and storage prices are reportedly rising rapidly, with brands like Dell and Lenovo announcing upcoming price hikes, while Asus has also joined the growing list of PC makers raising prices.
Even memory suppliers are sounding the alarm, with Micron confirming that memory shortages and pricing pressures will continue. Due to AI competition, the era of cheap phones may be coming to an end, and entry-level and mid-range segments are expected to shrink as costs rise.
Pei agrees, saying brands that have built their reputation on offering more specs for less money will struggle. Nothing itself plans to increase prices across its entire lineup, especially as the company upgrades products launching this quarter to UFS 3.1 storage.
Nevertheless, Pei sees an opportunity. He argues that 2026 marks the end of the specifications race and the beginning of something else. With raw hardware no longer cheap, user experience, design and the feel of using a phone are becoming more important than ever. In his opinion, the era of cheap silicon is over and conscious design is just beginning.
