Carl Pei Warns Smartphone Prices are likely to keep rising in 2026 as AI demand tightens memory supply and lifts component costs. He also suggested festive smartphone discounts in India may stay shallow if brands have less room to cut prices without hurting margins.

Festive Smartphone Discounts May Stay Shallow This Year

Smartphone buyers waiting for the next festive sale cycle may not see the same deep discounts they are used to. That is the basic message coming from Nothing co-founder Carl Pei, who says the cost structure behind phones is changing in a way that leaves brands with less flexibility.

According to Pei, memory is no longer a cheap upgrade path. Demand from AI firms is locking up supply, which is pushing component costs higher than before. When one of the key parts inside a phone becomes more expensive, brands usually have only a few choices. They can absorb the pressure, trim specifications, or pass more of it on to the customer.

In the mid-range and premium segments, that trade-off matters a lot. These are the price bands where buyers often expect better cameras, faster chips, and more storage, but still look for discounts during major sales. If memory and other components remain costly, brands may have less room to offer aggressive festive cuts without reducing margins.

That is especially relevant in India, where year-on-year price jumps are already being noticed on some launches. Festive sales usually create the expectation of sharp markdowns, but Pei’s comments suggest the discount window could be narrower this year. In practical terms, that means shoppers may see offers, but not necessarily the deep reductions many have come to expect.

The bigger point is that smartphone pricing is no longer shaped only by competition among phone makers. External demand from AI companies is now affecting the supply of hardware components, and memory is one of the pressure points. If that trend continues, 2026 could bring another round of higher retail prices across multiple smartphone tiers.

For buyers, this does not automatically mean every phone will become expensive at once. Pricing will still vary by brand, market segment, and launch strategy. But the old assumption that newer models would arrive with similar specs at stable prices is starting to look less reliable.

That is where Carl Pei’s warning lands. The combination of tight memory supply, higher component costs, and limited discount room could reshape how phones are priced over the next year. For shoppers in India, the festive season may still bring deals, but the deepest cuts may be harder to find.