Nothing’s phone prices to go up due to rising memory costs, says CEO Carl Pei

Nothing CEO Carl Pei on Wednesday (January 14, 2026) said that pricing will inevitably increase across their smartphone portfolio due to rising memory costs which has already increased by up to 3x. He wrote on X that it is going to impact products launching in Q1 with UFS 3.1, the most.

With huge demand in AI data centers, the cost of memory modules is expected to go up by 5x by the year end for the top tier phones, and the bill of materials (BOM) will also rise significantly.

“Memory is fast becoming one of the most expensive smartphone components and potentially the single largest cost driver in the bill of materials by year-end, with estimates suggesting that memory modules which cost less than $20 a year ago could exceed $100 by year-end for top-tier models,” wrote Carl.

For the first time, smartphones are competing directly with AI infrastructure and memory prices are rising sharply as a result, he mentioned.

Carl said that brands now have a simple choice: either raise prices, by 30% or more in some cases, or downgrade specs.

“The “more specs for less money” model that many value brands were built on is no longer sustainable in 2026. As a result, some markets, particularly entry and mid-tier segments, are likely to shrink by 20% or more, and brands that have historically dominated these segments will struggle.”

He also feels that this could be a great opportunity. “Operating without the cost advantages of industry giants forced us to innovate differently. We learned early on that we couldn’t win on spec sheets alone; instead, we focused on perfecting the user experience, proving that how a phone looks and feels matters far more than its raw numbers. That’s where our focus has always been.”