Your Next Smartphone Will Cost More in 2026, Carl Pei Explains Why

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-Kabir Jain

Updated: Wednesday, January 14, 2026, 15:07 [IST]

If phones already feel pricey, Carl Pei says the real shift is still ahead. In a recent post, the Nothing founder laid out why 2026 could be the year smartphones fundamentally change, not just in specs, but in pricing too.

The short version is simple. The old rules no longer apply.

Why the old smartphone pricing model is breaking

For nearly fifteen years, the smartphone industry operated on one reliable trend. Core components like memory and storage kept getting cheaper over time. That made it possible for brands to add more RAM, better cameras, and faster storage every year without pushing prices up too much.

Pei says that the assumption has finally collapsed. Memory prices are rising sharply, and this time it’s not a temporary spike. It’s a structural change that directly affects how much a phone costs to build.

AI is now competing with smartphones for memory

The main reason behind this shift is AI. The same memory used in smartphones is now critical for AI data centers. Large tech companies are locking in silicon and memory supply years in advance to fuel AI growth.

That leaves smartphones competing with AI infrastructure for the same components. For the first time, phones aren’t the priority customer, and prices are rising as supply tightens.

Memory is becoming the biggest cost driver

According to Pei, memory costs have already increased by as much as three times in some cases. Components that cost under $20 a year ago could cross $100 by the end of 2026 in top-end phones.

When memory becomes one of the most expensive parts of a phone, the entire bill of materials shifts. That makes it much harder for brands to keep prices steady while upgrading specs.

What this means for Nothing’s smartphones

Pei is clear that Nothing won’t be immune to these pressures. Pricing across Nothing’s smartphone lineup will increase, especially as newer products move to faster standards like UFS 3.1 storage.

At the same time, he frames this moment as an opportunity for the brand. Without the scale advantages of larger manufacturers, Nothing was forced early on to focus less on spec sheets and more on how its phones look, feel, and work in daily use. As raw specs become more expensive to push, that approach may matter more.

The specs race may finally slow down

Pei’s broader point goes beyond Nothing. Brands now face a tough choice. Either raise prices, sometimes significantly, or cut back on specs. The familiar “more for less” formula, especially in entry-level and mid-range phones, is becoming harder to sustain.

In his view, 2026 could be the year the specs race loses relevance. Design, software experience, and product intent may end up carrying more weight than raw numbers.

Cheap silicon, Pei argues, is no longer guaranteed. What comes next is a smartphone market where higher prices are harder to avoid, and differentiation comes from experience rather than excess.