Nothing CEO Carl Pei: Smartphones will keep getting more expensive
If you’ve been wondering why new smartphones seem to cost more every year, according to Nothing CEO Carl Pei, things could get significantly worse before they get better.
In a recent post on X (formerly known as Twitter), Pei claimed that memory has become the single most expensive component inside a smartphone, surpassing even the processor and display. According to him, memory can now account for more than half of a smartphone’s total hardware bill of materials.
Pei revealed that for the Nothing Phone (4a), memory costs had already doubled between the time the company decided to develop the device and its eventual launch. Since then, he says memory prices have doubled yet again.
“Memory is now the most expensive component in a smartphone. It’s more expensive than the processor, more expensive than the display, and can account for more than 50% of the total hardware bill,” – Carl Pei, Nothing CEO
The executive added that he had previously warned about rising memory prices earlier this year, but believes the situation is now unfolding even faster than expected.
According to Pei, the impact is already visible in the market. He claims that since February, newly launched smartphones have been arriving with price increases of up to US$100 compared to their predecessors. In India, devices priced above ₹30,000 have reportedly seen price hikes of ₹7,000 or more.
The reason, according to Pei, isn’t simply a matter of manufacturers choosing to charge more. During periods of memory shortages, smartphone brands can’t simply stockpile components in advance. This means manufacturers have limited ability to shield consumers from rising component costs, especially when memory suppliers prioritise allocation across multiple industries, including smartphones, PCs, AI servers and data centres.
As a result, Pei believes smartphone prices will continue climbing through next year, while consumers should also temper expectations regarding promotional discounts. He also concludes his post by stating that the best time to have bought a new smartphone was yesterday, and that the next best time would be now as there likely won’t be any more deep discounts after this.
“If you’ve been waiting to upgrade a device, the best time was yesterday. The next best time is now. This year’s sale season won’t have the discounts people are used to,” – Carl Pei, Nothing CEO
Whether Pei’s prediction proves accurate remains to be seen. Memory pricing has historically been cyclical, with periods of shortages often followed by oversupply and falling prices. However, growing demand from AI infrastructure, cloud computing and increasingly memory-hungry devices could keep pressure on supply for longer than previous cycles.
That said, it’s worth noting that Pei isn’t exactly a neutral observer here. As the CEO of a smartphone company, he naturally benefits from encouraging consumers to upgrade sooner rather than later. So while his comments on memory costs may well reflect genuine industry concerns, his conclusion that ‘the best time to buy was yesterday, the next best time is now‘ should probably be taken with a healthy dose of skepticism.
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