Smartphone price hike to continue, festive sales may not yield good discounts: Carl Pei

Buying a new smartphone is already difficult with the price hikes, and it could get even more expensive over the next year as the AI industry competes for the same memory components used in mobile devices, according to Nothing co-founder Carl Pei. In a series of posts on X, Pei said the smartphone industry is facing a major change after years of benefiting from falling component prices. Traditionally, brands could offer more RAM, storage, and better displays without significantly increasing prices because key parts became cheaper over time. That trend, he said, is now reversing.

Smartphones to get even more expensive

Pei claims large AI companies are reserving memory and semiconductor production capacity years in advance to power data centres, leaving less supply for smartphone makers. As a result, memory prices have surged sharply, with some components reportedly costing up to three times more than before.

Pei added that memory is becoming one of the most expensive parts inside a smartphone, in some cases costing more than the processor or display. He added that manufacturers may soon have to choose between raising prices and reducing specifications to protect margins. This is something we’re already seeing in the smartphone market, especially in the budget segment, where the hardware seems very modest for its price.

The warning comes as several smartphone brands have already launched newer models at noticeably higher prices than their predecessors. According to Pei, some devices in India have become more than Rs 7,000 costlier year-on-year. Not just new launches, but existing ones are also price hikes multiple times. This shift, while challenging, might finally force consumers to reconsider their upgrade cycles.

Nothing expects the trend to affect its own products as well, especially as newer devices adopt faster storage technologies such as UFS 3.1.

Based on the current situation, delaying an upgrade could mean paying more later if component shortages continue. While festive sales are still expected, discounts may not be as aggressive as in previous years. If you’re planning to replace an aging smartphone may find better value by purchasing sooner rather than waiting for next year’s launches, particularly in the mid-range and premium segments.