Contrary to previous rumors, the device is unlikely to have a dedicated slot for the stylus, per a new report.

Technical challenges may make S Pen slot impossible on the Z Fold 3

The chaebol had apparently initially intended to make room for the stylus but is now reconsidering the idea. That’s because of two reasons. 

First, the device doesn’t have enough space for a stylus compartment. 

Second, a stylus slot could expose it to water and dust damage. Although Samsung’s foldable phones aren’t waterproof or dustproof, the Z Fold 2 is seemingly more durable than the OG Fold because it comes with an anti-erosion waterproof coating. 

The decision, which was made only recently, has apparently not been finalized. The company reportedly has time until mass production begins in June to change it.

Either way, it’s likely that the Z Fold 3 will be compatible with a stylus. If a dedicated stylus doesn’t make the cut, Samsung will likely offer special cases to accommodate the digital pen, something it has also done with the S21 Ultra.  
The report also seems to insinuate that the S Pen Pro, which was announced alongside the S21 Ultra, will work with the Z Fold 3. Take this bit with a pinch of salt as past reports say that Samsung has developed a different kind of stylus to work with foldable displays.

Per previous reports, the Galaxy Z Fold 3 will be powered by the Qualcomm Snapdragon 888 chipset, which will be mated with at least 256GB of storage. The phone may also boast an under-panel selfie camera.