Smartphone Prices in 2026: Expect Higher Costs

The RAM shortage affects more than PC builders

When you hear about memory shortages, you probably picture frustrated PC builders and gamers complaining on Reddit about eye-watering DRAM prices. And yes, that’s very much the case, and has been for the past few months.

However, it’s not just a PC issue. The same shortage that’s making gaming rigs more expensive is about to have a big effect on the 2026 smartphone market, and it boils down to one simple thing: AI.

Companies like Samsung, SK Hynix, and Micron have realised they can make significantly more money selling high-bandwidth memory to data centres for AI applications than they can flogging RAM for smartphones. So they’ve shifted their production capacity accordingly, and suddenly there’s not enough of the type of RAM your phone needs to go around.

We’re not talking about a 10-20% price increase here either; DRAM contract prices shot up by over 170% year-over-year by the third quarter of 2025. For smartphone components specifically, costs increased by as much as 25% by the end of last year, with another surge of up to 15% expected by mid-2026, according to analysts.

The worst part is that this isn’t an easily fixable situation. Building new production lines takes years and costs a lot of money, so even if manufacturers wanted to solve the supply problem tomorrow, they couldn’t. Some sources reckon this shortage could drag on until 2027 or even 2028.

Nothing’s CEO has already confirmed a 2026 price hike

While most phone makers have been sweating about rising component costs behind closed doors, Nothing CEO Carl Pei was the first to just come out and say it: your next smartphone is going to cost more. A lot more, potentially.

Pei took to X to share the news. He explained that the smartphone industry has relied on a bedrock assumption for the past fifteen years that components would inevitably get cheaper over time. In 2026, as he put it, that model has “finally broken.”

Pei explained that, as expected, it’s down to soaring memory costs driven by AI data centre demand. He even provided some eye-watering estimates, suggesting that memory modules which cost less than $100 a year ago could exceed $400 by year-end for top-tier models. The choice facing brands, according to Pei, is to either raise prices by 30% or more, or downgrade specs.

Nothing’s upcoming phones, including the Phone 4a series, will be affected. Pei claims that it’s “the year the specs race ends,” arguing that as hardware becomes more expensive, the industry will be forced to focus on user experience and design instead.

Nothing’s PR team should be praised for that spin, but let’s be honest: it’s still going to mean paying more or getting less for your money.

What makes Pei’s intervention particularly important is that he’s essentially given everyone else in the industry cover to do the same thing. If they’re raising prices, everyone else will probably follow suit.

Rumours suggest other brands are similarly struggling

And follow suit, they almost certainly will. The rumour mill has been churning overtime with reports of price increases and spec stagnation across virtually every major manufacturer.

The Samsung Galaxy S26, rumoured for reveal in February, will be affected, with South Korean reports suggesting increases of around $30 for the base model and $60 for the Ultra. That would be the first price hike for the Galaxy S series in three years.

Elsewhere, Xiaomi’s top-end 17 Ultra costs 10% more than its predecessor in China, purely because of the RAM issue.

And, of course, we now know that Nothing’s Phone 4a range will be affected in some way due to the shortage.

It’s easy to assume that the likes of Apple, Oppo, Motorola and Honor are similarly considering their options behind closed doors, painting a picture of an industry-wide issue.

Budget and mid-rangers are more at risk here

Here’s where things get really grim. If you’re in the market for a flagship phone, you’ll likely face modest price increases and perhaps miss out on a RAM upgrade you probably didn’t need anyway. Annoying, but not the end of the world by any means.

If you’re shopping in the budget or mid-range space, though, you’re looking at a much rougher ride. These phones are way more vulnerable to the RAM shortage because memory makes up a larger chunk of their total bill of materials.

That could result in higher prices or, more likely, manufacturers will make compromises to hit the same price points, which means you’re going to see some painful spec downgrades.

We’re already seeing warnings that budget phones might revert to just 4GB of RAM, down from the 6GB or 8GB that’s become standard in recent years, while mid-rangers that currently offer 12GB might get capped at 8GB.

And it won’t stop at RAM, either. To offset memory costs, manufacturers will likely downgrade cameras, displays, and audio systems as well. The practice of recycling older components from previous generations is about to become far more common.

The year ahead

Look, I’m not going to sugarcoat it; 2026 is shaping up to be a pretty bleak year if you need a new phone. The combination of supply constraints, surging component costs, and industry-wide price hikes means you’ll be paying more for less across almost every price segment.

The worst part is that this isn’t being driven by any fundamental improvement in phones themselves. We’re not paying more because of amazing new technology or breakthrough features. We’re paying more because AI companies are hoovering up all the good memory for their data centres, and phone makers are left fighting over the scraps.

The age of cheap, abundant smartphone memory is over. Welcome to the expensive new normal.