Three reasons why the Samsung Galaxy S21 is cheaper than the S20

"This year, we've seen what we call a bifurcation within the premium smartphone market, where there's a growing diversity of needs amongst different types of consumers.

"So on one hand, we see some consumers increasingly prioritise value. We hear things like they're less willing to pay for the most expensive phone, or that a more affordable model might be good enough to meet their needs.

But on the flip side, there's still those who need to get their hands on the latest Galaxy device."

Drew Blackard, vice president of product management for Samsung Electronics America

Why has Samsung gone low?

There are three key factors influencing Samsung's pricing policy. These are

• The global economic uncertainty inspired by the pandemic. The entire smartphone market declined by 13% in the first quarter of 2020 impacting sales of last year's S20 range which were down by 35% compared to the previous year's lineup. Price sensitivity has been enflamed by the lack of consumer confidence and drop in consumer spending.

• Customers holding onto their devices longer. The device replacement cycle has been lengthening for the past several years despite manufacturers attempts to entice upgrades with bonus ear plugs or trade-in credits. The general sense is that flagship devices are offering only incremental improvements rather than bold new technology and consumers are not inspired to upgrade to each new model as it emerges. 

• Competitive pressure from Apple. Samsung's biggest competitor introduced the iPhone 12 range in October 2020 with a minimal price increase over the iPhone 11. The iPhone 12 Mini starts at AUD $1,199 and the iPhone 12 at AUD $1,349 so unless Samsung dropped its price, the S21 it would have been more expensive in Australia than the iPhone 12. 
  
  

Pricing maintains a buffer against Apple