Updated: Samsung Galaxy S21: Significant Improvements at Lower Prices

Analytical Summary

Samsung is updating its main premium Galaxy S line a bit earlier in the year than in the past. The Galaxy S21 features a wide range of improvements to the camera, display, and processor at lower starting price points than it charged for the Galaxy S20 last year. The base Galaxy S21 also undercuts Samsung’s main competitor, Apple’s iPhone 12, on price as well. For those who are not price sensitive, Samsung is not forgetting early adopters who are willing to pay above $1,000 for the biggest and best, and the Galaxy S1 Ultra adds extreme camera zoom capabilities that should provide sharper and more stable images than last year’s initial Space Zoom system. While the changes are largely iterative – for radical innovation, consumers should look to Samsung’s Z line of foldables – few consumers upgrade every year. Anyone coming from a phone from two or three years ago will find the camera, display, and battery improvements significant enough to be worth the upgrade.

Hardware

Design: Samsung somehow found a way to make the slab-with-camera-cutout design more visually interesting than in the past. Techsponential has review units of the Galaxy S21 and S21 Ultra, and they look better in real life than in photos. While most will eventually cover up the phone in a case, distinctive design should not be underestimated as an indicator to consumers that the phone is different and new. 

Imaging: Smartphone cameras have gotten good enough that the differences are mainly in how each manufacturer deals with tricky lighting situations, portrait modes, and low light. Still, consumers highly value better cameras, and Samsung is highlighting small changes it is making to the S21/S21+, and somewhat bigger changes to the S21 Ultra. Samsung has gained more experience with these sensors, its processing and AI have improved, and image quality alone should justify an upgrade for anyone with a phone 2 – 4 years old.

The Galaxy S21 Ultra gets the biggest upgrade with a dual-camera zoom system that includes a proper 10x optical zoom and stabilized focus for usable images up to 30x and party trick shots at 100x. Samsung perfected focus and bokeh on the 108 MP sensor with the Galaxy Note20 Ultra; that system carries over to the Galaxy S21 Ultra with additional pixel binning techniques.

Samsung is also promising better video quality on all the S21’s, which will make Samsung more competitive with Apple (the leader in video recording) and vault Samsung ahead of Android rivals.

Display: Galaxy phones have long gotten Samsung Display’s best panels, and, my goodness, the screens on the Galaxy S21 family are good. Exceptionally bright – even outdoors, with essentially perfect color, and tremendous contrast. At 120 Hz, Samsung is not trying to beat Chinese rivals for fastest refresh rate, but rates above 120 Hz brings no benefits outside of a few mobile game titles, and Samsung’s variable refresh rate nicely balances display performance and phone battery life. In any case, scrolling and animations are noticeably smoother than on Apple’s iPhone, which maxes out at 60 Hz.

Performance: In North America, all Galaxy S21 variants get Qualcomm’s latest Snapdragon 888. The 888 has faster processing, graphics, and AI, all with better battery efficiency. The 888 also integrates Qualcomm’s latest X60 modem which supports all flavors of 5G, including mmWave. The Galaxy S21 has been certified for n71, the C-band spectrum that Verizon, AT&T, and the cable consortium are bidding on in the current FCC auction in the U.S. It also supports mmWave, which will make Verizon happy, and carrier aggregation, so it should be even faster on T-Mobile, the one U.S. carrier that already has mid-band spectrum deployed. This makes the Galaxy S21 the fastest, most versatile option carriers have to utilize the 5G networks that they are building. Unsurprisingly, U.S. carriers are offering generous incentives on the Galaxy S21, and can be expected to push them hard at retail. While there will be other phones with these capabilities from LG, OnePlus, and others, they don’t sell near Samsung’s volumes. Apple won’t put an X60 modem in an iPhone until the next generation towards the end of the year.

In much of the rest of the world, the Galaxy S21 will use Samsung’s newest Exynos 2100 chip, which also boasts significant speed, graphics, and AI improvements. Samsung is integrating mmWave 5G on Exynos for the first time, which will help Samsung in Korea, even if mmWave isn’t broadly deployed yet.

Software and Ecosystem

Software and ecosystem developments are nearly as important as hardware in modern smartphones. After stripping down its interface layer on top of Android, Samsung’s OneUI 3 is starting to add features and customization.

Samsung Free: Samsung is also taking baby steps towards competing in content with Samsung Free, an ad-supported streaming media service that is a swipe away from the home screen by default. Techsponential still needs to spend time with Samsung Free, but at first glance, Samsung Free appears to be more like the Roku Channel than Apple TV+ or Netflix.

Software partnerships: Samsung has been highlighting its partnership with Microsoft since early 2017, and it did so again at the Galaxy S21 Unpacked event. This relationship is more than just a marketing agreement; Microsoft’s OneDrive is the phone’s suggested cloud storage solution, there are links to integrating the Galaxy S21 with Windows, and Samsung is actively marketing Microsoft’s Xbox streaming service. Samsung also is working to make its apps work with Microsoft’s Office suite; for example, Samsung Reminder will sync with Microsoft To Do.

Unexpectedly, Samsung also brought Google into Unpacked. Google Duo and Google Messages are now native apps, and Google will be launching a TalkBack screen reader on the Galaxy S21. Google Messages offers carrier RCS support, but this is unlikely to make a big impact on RCS adoption, as Samsung’s Messages will still be the default messaging app on the phones in the U.S.

S-Pen: Samsung is also bringing S-Pen support to the Ultra, ensuring that consumers buying the top end of its main flagship line are not missing out on a key Samsung differentiator. Unlike the Galaxy Note, Galaxy S21 Ultra buyers will have to buy the S-Pen separately and store it outside the phone itself, but Samsung is making both options surprisingly affordable ($39 on its own, or $69 with a case). The optional S-Pen lacks some of the tricks of the powered Bluetooth S-Pen found on Galaxy Notes. Still, even the unpowered S-Pen opens up new use cases for the Galaxy S21 Ultra, gives Samsung a differentiator from the competition, and enhances Samsung’s wider ecosystem. Samsung loyalists who have GalaxyBook PCs or Galaxy Tab tablets already have an S-Pen, but there are likely to be more Galaxy S21 Ultra buyers who don’t have a Samsung tablet or convertible, and now they have another incentive to buy one.

This obviously blurs the already thin line between the Galaxy S and Note lines, but Samsung insists that the Note line is not being discontinued. Samsung should have room to offer Notes below the $1239 price of a Galaxy S21 Ultra with S-Pen, and will likely lean harder into productivity features, a key focus of Note buyers.

SmartTag: Samsung is getting into the tracker business, first with an inexpensive Bluetooth tag, and later in the year with UWB versions and an AR app that makes finding your keys more like a high-tech game.

Digital Car Keys: Samsung launched an initiative to turn its phones into car keys last year when it added UWB (Ultra Wideband) in the Galaxy Note20 Ultra. Samsung is now moving UWB to slightly lower price points and is including it in the Galaxy S21+ and Ultra. Samsung’s auto partners include BMW, Audi, Ford and Hyundai's Genesis. In the short term, this will be too limited to have much competitive impact. However, longer term, tying a car key to a specific phone brand should be a compelling reason to stick with that brand. Apple has a similar feature, but Xiaomi and OPPO do not, and it takes time to forge relationships with automakers.

Galaxy Buds Pro: Samsung has a full line of wearables, including earbuds and smartwatches. The Galaxy Buds Pro add ANC to Samsung’s in-ear wireless earbuds, which provide better sound quality and noise cancellation than the beans-like Galaxy Buds Live from 2020. Techsponential has a separate report on the Galaxy Buds Pro.

What’s missing?

Every phone generation brings change, and it is not always additive. The biggest loss for the S21 is that Samsung has removed the microSD card slot. This is mitigated somewhat by each variant starting with a reasonable amount of embedded storage capacity, but it is still a loss in terms of flexibility.

Magnetic stripe reader capability has been dropped for Samsung Pay. This is more about sunsetting a transitional technology as cost savings. NFC is now widely deployed at point of sale, and most consumers didn’t know that this magic technology to wirelessly jumpstart magstripe readers even existed.

Following Apple’s much publicized removal of the power supply, Samsung is doing the same, with both companies pointing to the environmental impact as their rationale. This is not going to hurt sales – most consumers really do have multiple chargers already, and Samsung standardized on USB-C years ago, so compatibility is not an issue. Consumers without a fast charger will still want to purchase one, but electronic waste is a real problem; this is not just an opportunistic way for manufacturers to cut costs.

There are also some minor technical and build changes. The Galaxy S21 display resolution has been cut to 1080p, but consumers shouldn’t notice – it’s plenty sharp, and that was the maximum resolution on Samsung’s previous phones when running at higher refresh rates. The faster display is preferable to additional resolution that can be hard to perceive. The Galaxy S21 also cuts costs by using a plastic back rather than glass. This is a matter of personal preference; I actually like the feel of the plastic (Samsung calls it “glastic”) better than glass, and it is more durable. These are minor losses and are more than offset by the more attractive starting price.

Pricing

In 2019, Samsung did not offer a Galaxy S20 for less than $999 until it launched the $699 Galaxy S20 FE in the fall in response to the pandemic. This year, Samsung is starting pricing at $799 for the Galaxy S21, around the same price point of Samsung’s flagships from prior years and in line with what consumers expect mainstream flagships to cost. The Galaxy S21+ and S21 Ultra are also $150 - $200 below last year’s models. Samsung has made a few judicious decisions to keep costs down on the base Galaxy S21, but Samsung is largely benefiting from lower component costs; it has a lot of experience building 5G phones at this point.

In the U.S., carrier incentives can bring the cost down significantly if you are able to trade in a recent phone and spread out the rebate over 24 – 30 months. These offers are universally offered to switchers, but AT&T is letting existing customers in on the fun as well.

Competitive Landscape

In the U.S., Samsung faces two main competitors: Apple and itself (consumers are holding onto phones longer, especially during the pandemic’s economic uncertainty). Outside the U.S., there is Apple, along with Chinese brands that are making inroads with technically proficient flagships at lower prices, but the most prominent premium Chinese brand, Huawei, has been hurt by U.S. government sanctions.

By making across-the-board improvements but keeping prices well under $1,000, the Galaxy S21 is giving LG, OnePlus, and Google much less room to sell mid-tier smartphones. Above $1,000, the Galaxy S21+ and S21 Ultra provide benchmarks for the ultra-premium segment that make it harder for Microsoft and Motorola to sell dual-screen or folding devices without equivalent imaging, displays, and network capabilities.

To discuss the implications of this report on your business, product, or investment strategies, contact Avi at avi@techsponential.com or +1 (201) 677-8284.

[This report was originally published January 14, 2021 as an analytical summary. It was expanded into a full report on January 19, 2021]