Carl Pei, Co-founder of Nothing Inc.
Credit: DH Photo/KVN Rohit
In the last quarter of 2025, many who upgraded to any of the Android flagships, such as the OnePlus 15, Oppo Find X9 series, Vivo X300, iQOO 15 or even the mid-range phones, would have noticed a steep increase in launch price compared to their respective predecessors.
The sharp inflation in smartphones is primarily attributed to the shortage of memory chipsets and the increased costs of silicon processors. Most of the stocks are being diverted to scaling up the infrastructure for data centres to run powerful generative Artificial Intelligence (gen AI) models.
Many believed this to be a short-term cyclic aberration, like the post-COVID era. But it is not and is expected to continue in 2026 and beyond, warns Nothing Inc's co-founder Carl Pei.
"Memory modules, which used to cost less than $20 a year ago, could exceed $100 by year-end for top-tier models. The result is a structural shift. This is a reversal of everything we’ve come to expect from this industry. When something that used to get cheaper every year suddenly becomes a lot more expensive, the economics of building a smartphone fundamentally change," said Pei.
Smartphone companies will have to make a hard choice to either bump the price and pass on the burden to the customer or downgrade the specifications and focus on improving the user experience.
Without falling in to trap of specification war between rival brands, Nothing Inc. has managed to find good traction among youth with creative design elements and a unique minimalist user interface in their phones.
Pei believes Nothing Inc's, which is just five years old in the industry, will be focused on perfecting the user experience, how a phone looks and feels, rather than the raw numbers (chipset series, benchmark scores).
"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," concluded Pei.
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