Nothing CEO Carl Pei has cautioned consumers that smartphone prices are climbing and will continue to do so throughout next year, mainly driven by surging memory costs that now represent over half of a phone’s hardware expenses.
- RAM prices have doubled twice recently, becoming the largest hardware cost.
- Phone prices have increased by up to $100 compared to last year’s models.
- Sale season discounts will be less generous amid persistent memory shortages.
What happened
Carl Pei, CEO and co-founder of Nothing, revealed that the shortage of RAM has had a significant impact on the cost structure of smartphones, including Nothing’s own Phone 4A. He noted that memory costs for this device doubled during development and doubled again by the time of its release.
Pei also indicated that since February, new phones have launched at prices up to $100 higher than previous versions, with markets like India experiencing substantial price hikes above certain price thresholds. This shortage has contributed to an overall increase in phone prices across the industry.
Why it matters
As RAM now accounts for more than 50% of the hardware expenses in smartphones, the memory shortage places upward pressure on phone prices, affecting affordability for consumers worldwide. This shift challenges the common expectation of gradual technology price reductions over time.
Major manufacturers such as Samsung and Google are also expected to increase their device prices due to these escalating memory costs. With fewer discounts and rising component prices, consumers may find it harder to justify delaying phone purchases.
What to watch next
Industry watchers will need to monitor how the ongoing RAM shortage evolves and whether memory prices stabilize or continue to rise throughout the rest of the year and into 2027, as Pei forecasts. The allocation model for memory supply means buyers get devices at current prices with little chance of benefiting from future price drops.
Consumers should observe upcoming sale seasons closely, as the usual deep discounts may be limited. Those considering phone upgrades might find immediate purchasing more cost-effective compared to waiting, as Pei advises the best time to buy a phone is likely already past or immediate.