- Nothing’s CEO has said smartphone prices could rise by 30% or more
- This is due to rising memory costs, fueled by AI
- As a result, they argue the ‘specs race’ is over
2026 could mark the biggest shift yet in the smartphone landscape – and not for good reasons, as prices could dramatically rise, and specs could be downgraded.
This is according to Nothing’s CEO Carl Pei, who, in a rather bleak post on X, has claimed that “the long-term downward trend in memory and display costs allowed for annual spec bumps without price hikes. In 2026, that model has finally broken, driven by a sharp and unprecedented surge in memory costs.”
That “unprecedented surge” is, of course, driven by AI, as AI data centers require the same memory technologies, meaning that – in Pei’s words – “for the first time, smartphones are competing directly with AI infrastructure and memory prices are rising sharply as a result.”
So just how much of a price increase are we talking? Well, according to Pei, in some cases, memory costs have already increased by 3x, with further rises expected. He added that “memory modules which cost less than $20 a year ago could exceed $100 by year-end for top-tier models.”
Higher prices or worse specs
The result of this, according to Pei, is that “brands now face a simple choice: raise prices, by 30% or more in some cases, or downgrade specs.” This is the opposite of what we’ve seen in previous years, where components typically get cheaper over time.
Pei predicts that entry-level and mid-tier smartphone makers will particularly struggle as a result of this, and that Nothing’s own smartphone prices will inevitably increase too.
But despite this bleak outlook, in Nothing’s case, Pei argues this is an “opportunity”, as the company has always focused more on how its phones look and feel than the raw numbers, so with rising costs, the brand can simply double down on that approach.
He concluded that “2026 is the year the ‘specs race’ ends. As the industry resets, experience becomes the only real differentiator. That is exactly what Nothing was built for. The era of cheap silicon is over. The era of intentional design is just beginning.”
It’s a nicely put argument, and he’s not wrong that Nothing’s experience will probably give it an advantage over brands that have traditionally competed primarily on specs, but still, prices will rise – that much is bad news for everyone. And even if Nothing itself thrives in this environment, it paints a bleak picture for the smartphone industry as a whole.
Hopefully, this will lead to more creative innovations that don’t rely on pure power, but it might instead just mean that fewer phones are made and purchased. We’ll see how things play out as the year gets underway.
Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds. Make sure to click the Follow button!
And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form, and get regular updates from us on WhatsApp too.
