Samsung made the move because of lower component costs, some minor tradeoffs and the pandemic.
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Samsung’s Galaxy S21 lineup boasts a ton of updated features: Better cameras, faster 5G, a new design and even S Pen support on the Ultra model. The most notable difference from last year’s Galaxy S20, however, is the lower price. It’s also the flagship device’s biggest advantage in an increasingly crowded 5G phone market. (Here are CNET’s Galaxy S21 review and Galaxy S21 Ultra review.)
Samsung on Thursday said it’s cut the starting price of its three new smartphones by $200 from last year’s Galaxy S20, S20 Plus and S20 Ultra. The Galaxy S21 will start at $800, while the S21 Plus will retail for $1,000. The top-end Ultra will cost $1,200. Last year’s Galaxy S20 lineup, which marked the first time 5G came standard in all US variants of Samsung’s phone, started at $1,000 for the lowest-end version and $1,400 for the Ultra. (In the UK, the S21 will start at £769, just £30 cheaper than the S20.)
The change was largely caused by three factors: Lower component costs, some minor tradeoffs in the S21 and S21 Plus, and the world we now live in.
The move is a reversal from a few years ago, when Apple and Samsung made $1,000 the standard starting price for high-end phones. At first, many people accepted the hike, though plenty of others balked at the cost. Many held onto their older phones longer than before — about three years in the US — or sought out budget versions of iPhones and Galaxy phones. When 5G and more advanced materials were added to the devices, the companies again found it easier to justify the prices. Having the latest and greatest innovations isn’t cheap.
But some of those innovations have now been in the market long enough that Samsung and other companies can lower their base prices. This year, we’ve already seen a 5G phone in the US that costs $300. We’re also in the midst of an unprecedented global pandemic and recession that shows no signs of abating, despite the availability of vaccines. COVID-19 has infected over 92 million people and has killed nearly 2 million.
It’s likely Samsung’s lower prices are here to stay.
“This is kind of where we want to be,” Drew Blackard, Samsung Electronics America’s vice president of product management, said in an interview ahead of Samsung’s event. He noted that 2019’s Galaxy S10 lineup included prices as low as $750 for the Galaxy S10E and last year’s Galaxy S20 FE, which launched in September, cost $700.
This year’s S21 lineup meets “sweet spots” in the market when it comes to pricing and features, Blackard said.
“For people who want the highest end, Ultra experience, we still have that, and we’re not sacrificing [the features] based on price point,” Blackard said. “For people who want value and an amazing flagship experience at the same time, we still have a great offering for them with the S21. And then we’ve got something kind of in between for people who want a little bit of both.”
The rise of cheaper 5G phones
Samsung’s decision to cut the price on its new flagship devices follows a trend found across the mobile industry. The first 5G phones on the market in 2019 cost significantly more than their 4G counterparts. Samsung’s Galaxy S10 5G and Galaxy Note 10 Plus 5G both retailed for $1,300, $400 and $200 more than the 4G variants, respectively.
But the coronavirus pandemic has forced companies to reevaluate their launch plans and drop pricing for 5G phones much more quickly than expected. Companies have introduced mainstream devices alongside or shortly after pricier flagship models. And even premium models, like Samsung’s Galaxy S20 lineup, have seen steep discounts. Lower pricing is the only way for 5G to become mainstream, something carriers and device makers want to happen as quickly as possible.
The cheapest 5G phone in the US at the end of 2020 was the $400 TCL 10 5G UW, and OnePlus earlier this month unveiled the Nord N10 5G for $300 on T-Mobile’s network. Verizon, for one, will have phones tapping into its superfast 5G variant, called millimeter wave, that will cost “just below $300,” Brian Higgins, Verizon’s senior vice president of consumer device and product, told CNET in early December. And TCL could go even lower.
Afterlaunch of the TCL 20 5G, priced at 300 euros in Italy ($365), Stefan Strait, general manager of global marketing for TCL’s phone business, hinted at an even more affordable price for devices this year. “For the second half of the year, we could possibly do another step down,” he said in an interview with CNET ahead of CES.
Even Apple, known for its pricey lineup, didn’t price its 5G-enabled iPhone 12 family as high as it might have. It kept prices steady for its two highest-end devices — $999 for the iPhone 12 Pro and $1,099 for the iPhone 12 Pro Max — but increased the iPhone 12’s price by $100 over last year’s $699 iPhone 11. For that same starting price of $699, users can now get a device with a smaller display, the iPhone 12 Mini.
Samsung’s pricing plans
Early in 2020, Samsung introduced a less expensive A Series lineup of smartphones in the US. They cost significantly less than the S Series — the Galaxy A51 5G is $500 at AT&T and T-Mobile, but costs $550 at Verizon for the mmWave technology — though they also have fewer high-end features. Still, they’ve proved so popular with buyers that Samsung likely will introduce new A Series devices in the US this year.
And it specifically released the $700 Galaxy S20 FE in September as the coronavirus shut down the economy and cost millions of people their jobs. That device packs some high-end features found in the rest of the S20 lineup but starts at $300 less than the S20. The version for Verizon’s mmWave network brings the price up by $50 to $750.
“It’s very much a response [to the pandemic],” Blackard told CNET in September. He added, ahead of the S21 launch, that the FE brand won’t be going away.
“You’ll see more of the FE from Samsung, because it’s a brand that [has been] really successful since the launch late last year,” Blackard said. “We’re definitely committed to this through this year.”
Because companies like Samsung have been using similar high-end components — like 5G modems — for a while, higher volumes have resulted in lower prices.
“Getting into technologies early sometimes gives you bragging rights but not sales,” Creative Strategies analyst Carolina Milanesi said. “But then it also gives you leverage on the volumes you have.” Because Samsung has so many devices using high-end 5G chips, cameras and displays, it has “built a little more wiggle room from a pricing perspective” without sacrificing profits, she added.
All phones in the Galaxy S21 lineup in the US come with Qualcomm’s new Snapdragon 888 processor and integrated 5G modem. The new Snapdragon chip is more effective at connecting to all flavors of 5G, from the slower, more reliable nationwide variant offered by all the US carriers, or the speedier, but more finicky millimeter wave version touted by Verizon. The Ultra comes with four camera lens on the back, while the S21 and S21 Plus have three.
Preorders began Thursday at 8 a.m. PT, and devices arrive in stores Jan. 29.
Samsung made some slight trade-offs to reduce the price of its devices. It no longer includes a power charger or headphones in the box with its phones. (Like Apple,. Both companies still providing charging cables with their phones.) None of Samsung’s new phones include a microSD slot to expand the flash storage.
The S21 and S21 Plus have lower-quality displays than their predecessors, but they get Corning’s Gorilla Glass Victus on the front. The S21 Plus also has the new type of glass on the back, while last year’s Galaxy S20 and S20 Plus had Gorilla Glass 5, a four-year-old technology at the time. Instead of glass, even old glass, the back of the Galaxy S21 has a high-end plastic called polycarbonate. The base models of the S21 and S21 Plus come with 8GB of RAM instead of 12GB.
The Ultra has Victus glass on both the front and back and comes with 12GB of RAM in the base model.
CNET reviewer Patrick Holland called the S21 and S21 Plus trade-offs “mostly smart” and said Ultra users aren’t sacrificing any features to get that lower starting price.
Overall, Samsung has planted a flag for the new base pricing for high-end flagship phones. Competitors may soon respond, giving consumers even more options for 5G phones that don’t cost a fortune.
“These phones reflect a maturing smartphone market and a maturing Samsung,” Techsponential analyst Avi Greengart said, calling the Galaxy S21’s prices “fantastic.”