Google has said that upcoming Pixel smartphones will see a price increase, and is citing the rising cost of memory components as the main reason.
Higher RAM prices are increasing production costs around the world, and they find it difficult to sustain pricing across all the smartphones in the company’s portfolio.
The announcement came at a time when smartphone companies are already seeing higher manufacturing costs because of high semiconductor prices, supply chain problems and the growing demand for AI-based products.
Google said the RAM cost increase isn't limited to one model of the Pixel line and will impact the entire Pixel lineup of future flagship and mid-range devices.
Dynamic Random Access Memory (DRAM) and NAND flash memory prices have been on the rise in recent years because of the increasing demand from artificial intelligence servers, cloud infrastructure and high-end consumer electronics, industry experts said.
In the case of modern smartphones, which use huge memory volumes to support AI features and multitasking, and have advanced photography, manufacturers are finding it increasingly expensive to keep production costs in check.
Google said that while it is working to optimize manufacturing and sourcing strategies, component price inflation has reached a point where some of those extra costs are now factored into retail pricing.
And it said that it would continue to offer premium hardware, long-term software support, and AI-driven experiences if the price increase was not made.
The expected price hike can also affect future Pixel releases, including the Pixel flagship and budget Pixel models. Google has not disclosed how much it will be increasing for each device but analysts expect it will be modest to large given memory configurations and regional markets.
The move is in line with other smartphone trends. Meanwhile, a number of large mobile manufacturers have also increased smartphone prices or reduced promotional discounts because of rising component costs.
Memory suppliers have also said demand from AI data centers is not even close to the supply of memory and thus also adds to the pressure on prices.
As consumers are looking to upgrade to a new Pixel phone, they could buy devices that are currently in stock before a change in pricing is made.
Currently available devices will remain available to retailers and those that are not on sale will still receive promotional offers from retailers, but future inventory has to be made up at higher prices.
In spite of the higher prices, Google expects Pixel phones to have strong demand because of their AI-powered software features, computational photography, regular Android updates and integration with Google’s ecosystem.
Consumers are still demanding high-end experiences and long-term software support, even in a very competitive smartphone market, the company said.
And Google’s announcement also may be indicative of more price adjustments for Android smartphones in the coming months, especially if memory costs remain high. Other manufacturers that depend on the same global supply chain could also find that difficult.
For consumers, the news is a reminder that the price of smartphones will be affected by component shortages and AI-driven hardware demand worldwide.
And as the price of high-quality devices rises with the cost of production, consumers will see premium devices go up in the next product cycle.
