A major shift is coming to the smartphone world, and it could hit your wallet hard. Carl Pei, co-founder of the smartphone company Nothing, believes that 2026 will be a turning point for the entire industry. For a long time, phone manufacturers have been working on the same formula: component prices decreased over time, while phone features increased. But according to Pei, this model has now completely broken down.

Why are prices rising?

The biggest factor behind this rising inflation is artificial intelligence (AI). The memory chips used in smartphones are now also in high demand for AI data centers. Large tech companies are booking stocks of these chips months in advance to stay ahead in the AI ​​race. The direct consequence is that smartphone companies now have to compete with AI giants for these chips, driving their prices sky-high.

Memory prices triple

Carl Pei shared some startling figures. He says that in some cases, the cost of memory chips has increased by up to three times compared to before. A memory module that cost around $20 (approximately ₹1,600) a year ago could exceed $100 (approximately ₹8,300) by the end of the year for premium phones.

Companies now have only two options.

This crisis leaves mobile brands with two very difficult choices. They can either increase phone prices by 30% or more, or they can compromise on phone features and use lower-quality components. Pei warns that budget and mid-range phones will be hit hardest. Nothing's phones will also not be immune to this inflation, and their prices are almost certain to increase in the future. Now, design will reign supreme, not specifications.

Carl Pei believes that the time when people bought phones based solely on specifications like more RAM or camera megapixels is over. He said that 2026 will be the year when the specifications race ends. The era of expensive chips is here, and only those companies that focus on design and a superior user experience will survive. Nothing has been known for its distinctive design and aesthetics from the very beginning, and Pei believes that in the future, people will be more influenced by the "look and feel" of a phone.

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