The era of predictable Galaxy prices is over, don't expect it to return

Apple's price hikes for MacBooks and iPads this week got a lot of attention from the press. The company justified the increases by saying that it had “shielded customers from increases so far” but had “reached a point” where raising prices had become necessary.

Samsung already raised prices for some phones and tablets quietly earlier this year, and there are already reports that the upcoming foldables and wearables might be more expensive than the models they're going to replace. It didn't exactly make any public comments about the prior increases and it remains to be seen if the company will address this if the new devices end up being more expensive.

The framing from Apple at least seems to suggest that this is a reluctant response to extraordinary circumstances, and by necessary implication, a temporary measure. So one would expect that when the memory cycle cools down, perhaps the prices would come down as well.

Call it cautious optimism or wishful thinking, but there's an argument to be made that even if the situation normalizes, we may not see prices come down by as much as they'll go up.

Much of these price hikes have been forced by the relentless rise in memory chip prices driven by AI demand. Supply is extremely tight while demand is racing ahead, and new capacity won't come online for at least a couple of years.

Memory has historically been very cyclical. Prices went up but often came down harder. It was a predictable pattern that consumer device manufacturers could hedge against. That predictability has gone out of the window and is unlikely to return because the AI buildout is only just getting off the ground.

As AI becomes more central to all aspects of our lives, so will the demand increase to improve and expand the infrastructure that enables AI use cases. It's a global phenomenon. Companies and governments across the globe are rapidly investing to remain dominant in the race. Slowing down means you risk being left behind and that's simply not an option.

Market analysts are projecting the shortage to continue well beyond 2028. Even when new capacity comes online, prices are unlikely to fall to previous levels. The market may find equilibrium in a scenario where while memory prices don't increase as aggressively but they just remain higher for longer.

History supports this. The COVID-era chip shortage led to increased prices for consumer electronics. Even when supply chains stabilized, the prices didn't come down to previous levels. Manufacturers who took a hit on their margins during those years didn't voluntarily bring down prices more than they needed to.

The companies that raised prices during the shortage had no commercial incentive to lower them during the recovery. Neither will the companies raising prices now. That's the beauty of capitalism.

Flagship phones have steadily become more expensive over the years, with prices rising faster than inflation. The flagship Galaxy S5 was priced at $649 in 2024. By 2019, Samsung was charging $999 for the Galaxy S10+. 2023 brought the Galaxy S23 Ultra for $1,199 while the latest Galaxy S26 Ultra starts at $1,299. Prices for iPhones have steadily trended upward during the same period.

The new number is always the number. If by next year Samsung is forced to offer the Galaxy S27 Ultra at $1,499, it remains highly unlikely that we'll see $1,299 again for this flagship. Perhaps it may make a marginal cut but given that prices always go up every few years, we may never see them back at these levels.

The companies that survive the current challenging period will do so by passing costs on to buyers, adjusting product tiers, and in some cases quietly removing features or downgrading components to maintain price optics rather than actual value. We've seen some evidence of this from Samsung for its Galaxy A series already.

Samsung's mobile division is already projected to possibly turn an annual loss this year due to the current market dynamics. Its priority will be on margin protection and profitability if and when prices come down, again, that's just business.

The era of stable, predictable, occasionally declining consumer electronics prices lasted long enough that most people came to treat it as a natural law rather than a temporary condition. It wasn't, and it's over.