By Elizabeth Koh

SEOUL -- 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 giant is debuting three new models of its Galaxy S21 phones 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.

Samsung's first phone launch of the year is also typically the industry's first calendar year release, signaling what other competitors might also have in store.

The smartphone market is still recuperating from the coronavirus' economic fallout, 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 like 5G into phones retailing for as cheap as $325.

But the company still relies on pricey 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, like 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 approach may hold Samsung's earnings steady. Analysts project Samsung's smartphone profits will resemble those of years past, 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 -- in lieu of the glitzy events that once characterized their phone launches -- is rolling out three variants in the Galaxy S21 line: the S21, S21+ and S21 Ultra. Like their predecessors, they all continue to include 5G compatibility, which Samsung first introduced to the Galaxy S series last year.

The new phones boast similarly souped-up cameras with 8K video. They also feature comparable screen sizes, ranging from 6.2 to 6.8 inches, as well as 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 that has commanded premium prices.

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."

Write to Elizabeth Koh at Elizabeth.Koh@wsj.com

(END) Dow Jones Newswires

01-14-21 1014ET