Samsung Debuts Galaxy S21 Smartphones, With Lower Price Points

Samsung Debuts Galaxy S21 Smartphones, With Lower Price Points

Lineup extends many selling points of previous launches, but base model sells for $200 less than last year's version

On Thursday Samsung debuted three Galaxy S21 smartphones, upgraded earbuds and a gadget to track physical items.
On Thursday Samsung debuted three Galaxy S21 smartphones, upgraded earbuds and a gadget to track physical items.

Samsung Electronics Co.'s newest smartphones feature improved cameras, display functions for weary eyes and stylus compatibility.

But as global smartphone sales are projected to return to pre-coronavirus levels this year, the industry is trying to answer if the pandemic-weathered consumer will be satisfied with incremental improvements in technology and features. Samsung is betting the answer is yes.

The South Korean technology company introduced three new models of its Galaxy S21 phones on Thursday, hoping to gain ground on its sanctions-hobbled rival Huawei Technologies Co. and lift weaker sales of its flagship phones as global demand sputters back.

The most novel feature in Samsung's new offerings may be the price: The base model Galaxy S21 model will retail for $799, or $200 cheaper than last year's version. The S21+ will cost $999, followed by the top-of-the-line S21 Ultra at $1,199.

The smartphone market is still recuperating from the economic fallout of the pandemic, which briefly closed retail stores and caused people to delay buying new devices, analysts say. That helped push the average length of time consumers owned their smartphone to around three years, according to market-tracking firm Strategy Analytics, and overall smartphone sales slumped 20% in the first half of 2020.

But handset sales rebounded in the second half of last year, as global economies reopened and pent-up demand aided sales. Global smartphone revenue this year is projected to grow by 4% from last year, a level comparable to 2019, said Bryan Ma, an analyst for industry research firm International Data Corp.

"In the grand scheme of things, smartphones have been relatively resilient," he said.

Samsung also widened its lineup of midtier phones to boost sales last year, pushing once-premium features such as 5G into handsets retailing for as cheap as $325.

But the company still relies on pricier flagship devices to drive its handset business. Samsung's incremental improvements are a sign the smartphone market remains saturated, and its bet that consumers will continue to want the same things, such as improved camera quality, said Mr. Ma.

"Flagship smartphone launches these days are all kind of sound cookie-cutter: 'I have the best camera, I have 5G, look at how fast these processors are,'" he said. But with recovering demand, Samsung "needs to draw attention to the flagship line."

Consumers still carry high expectations for smartphone makers in seeking premium features for their devices despite the economic upheaval, said Sanjeev Rana, an analyst at brokerage CLSA. "This is something you live and breathe 24 hours a day--people aren't looking to downgrade themselves."

The new pricing on the Galaxy S phones reflects where competitors's flagship prices have settled in recent months. Apple Inc.'s iPhone 12 made its debut at a similar $799 for its entry model in October, after the company released its even more affordable iPhone SE earlier in the year.

Analysts project Samsung's smartphone profit will resemble that of past years, making up about a quarter of the conglomerate's annual profit, said Mr. Rana.

"I don't think it's going to change the company's fortunes, or it's going to move the needle much," he said.

Thursday's virtual event--streamed in lieu of the glitzy gatherings that once characterized phone launches--also introduced a new model of the company's wireless earbuds Galaxy Buds Pro, and the Galaxy SmartTag, a Bluetooth tracking device.

The Galaxy S phones all continue to include 5G compatibility and boast similarly souped-up cameras with up to 8K video. They include comparable screen sizes, ranging from 6.2 inches to 6.8 inches, with new AI-informed blue-light settings to minimize eyestrain.

But in a move widely seen as collapsing the difference between Samsung's Galaxy S phones and its Note flagship models, the Galaxy S21 Ultra is also compatible with the company's signature S-Pen stylus, though the implement is sold separately.

The company's Thursday releases didn't include a new foldable offering, which had been part of its two prior product launches. But the company has teased more such phones to arrive later in 2021, signaling it intends to keep investing in what remains a niche product category.

Foldable phone sales "are still a rounding error for Samsung," said Mark Newman, a senior analyst at brokerage Sanford C. Bernstein. "But it's more about establishing their brand."

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