Where Can Nokia Go After Its Massive 41-Megapixel Lumia 1020?

The new Nokia Lumia 1020 is more of the same: a Windows Phone 8-based smartphone that features mostly the same hardware, save for an almost preposterously powerful 41-megapixel camera.

Earlier this month, Stephen Elop, CEO of struggling Finnish phone maker Nokia, took to the stage in New York City to unveil the Lumia 1020, a Pop-Tart-size smartphone strapped with an almost preposterously powerful 41-megapixel camera. Even though specs of the 1020 had already leaked, Elop and his team spent the company's entire announcement—roughly 60 minutes—exclusively bragging about the phone's camera, praising its features and capabilities throughout countless demos. Apparently the crowd of tech reporters wasn't completely sold, as during a Q&A session following the event, Elop was inevitably asked what would set the Lumia 1020 apart—beside the camera—from competing devices made by Apple and Samsung.

"Other than the camera?!" Elop responded, feigning a dumbfounded look, as if to say, That wasn't enough? He then let loose a full-belly chuckle.

For Nokia shareholders, however, it's no laughing matter. The company has been getting hammered in the mobile market, with sales down 24% in the second quarter of this year, and the company has posted a net loss eight out of the last 10 quarters. While Lumia sales did double during that time—and are considered one of the few bright spots in the company's product portfolio—the company has only shipped about 27 million Lumias since 2011. By comparison, Apple sold 31 million iPhones last quarter alone. The question now isn't so much what sets Lumia apart from similar devices from Apple and Samsung—given its market share, apparently not a whole lot—but what sets it apart from previous iterations of Nokia Lumias. After all, if the Nokia Lumia 500, 600, 700, 800, and 900 series failed to capture consumer attention, why should we expect the 1020 to be any different?

The device, for one, costs $300 (with a two-year contract from AT&T), and while it has 1GB more RAM than the Lumia 925, it still runs on the same processor with the same 4.5-inch display. The camera itself makes the Lumia 1020 bulkier in weight, and it feels a bit top-heavy in your hand, like the phone comes wearing a backpack. What's more, the camera juts out from the device, a beveled circle that makes it feel like the Lumia 1020 has contracted ringworm. Unless you're a serious shutterbug, I can't see the 41-megapixel camera as being the deciding factor when considering a switch from a competing device. (I personally would settle for a less expensive Nokia device, with a less advanced camera, if it only had Instagram, the photo-sharing app which remains absent from the Windows Phone catalog.)

The larger concern is that not much has changed in Nokia's mobile strategy: It's the same story for the Lumia 1020 as it was for the Lumia 920 last year. Indeed, when Elop was asked the above question—about what beside the camera sets the Lumia 1020 apart?—he immediately fell back on the company's past product features. "Many of the other capabilities that we celebrated with the Lumia 920 are here as well," Elop explained, before ticking off a set of them. (Elop even confused the two phones at one point, saying this "will look great on the Lumia 920—er, 1020.") Imagine if Apple, when introducing the iPhone 5, began referencing iPhone 4 features as a reason to purchase the device.

The Lumia 920 unveiling, in fact, was remarkably similar to that of the Lumia 1020's. On both occasions, Nokia boasted of the hardware, its color story, its expansive display, and the advantages of Windows Phone 8—before talking up the company's PureView camera technology. "The Nokia Lumia 920 captures pictures and video better than any competitor—it takes the best pictures and video of any smartphone," a Nokia executive boasted on stage last year, echoing sentiments expressed on stage by Elop again this month.

So what's changed this time around, other than Nokia creating an even better (best-er?) camera? Not much. Photogs will rejoice, but for those of us who can't tell the difference between Nokia's 41-megapixel camera and Samsung's 13-megapixel one, we're not likely to be intrigued enough to learn the difference for ourselves.

That is, until Nokia's 100-megapixel camera next year, right?

[Photos courtesy of Nokia]

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  • Christopher

    You fail at business analysis. 

    Nokia's fall in revenue and profit was not due to bad Lumia sales. Rather, it was because of falling featurephone sales — which Nokia is attempting to offset with the Asha series running on S40. There's very little Nokia can do about this accept press for a sub-$100 Lumia for emerging markets. 

    As for the Lumia 1020, Stephen Elop already stated that this is a niche device. It's purpose isn't to crush the iPhone or Galaxy models. Rather, its purpose is to push technology and create buzz — thereby creating a halo effect for Nokia's other models. This is akin to what Ford does with the Shelby GT500.

    Nokia's real growth isn't in the high end. It's in the midrange and low end. If you did even an afternoon's worth of research, you'd know that the best selling Lumia is the Lumia 520. Nokia has sold millions of this model, and is undercutting Android in regards to "bang for your buck".

  • acarr

    Hey Christopher, thanks for the note, but you're a bit off here. Yes, the reason for the company's falling revenue is in part due to a declining feature phone market. But one larger reason for shareholders longer-term pessimistic outlook -- and the reason Apple is worth roughly 26 Nokias -- is because the company completely failed to offer an adequate alternative to the iPhone, much in the same way BlackBerry/RIM did. 

    What's worse, after it fell behind in the smartphone market, it latched on to Windows Phone instead of Android. While I consider it to be a very elegant OS, it has barely gained 4% market share, due to OEMs like Nokia and others being unable to produce (again) a compelling alternative to the iPhone and other Android devices.

    If you think Nokia is only interested in going after niche markets, well, I don't know what to tell you. Yes, the Lumia 520 is helping them to attack the low-end market, but the margins are much worse and its not making enough of a dent to attract developers to the Windows Phone platform. 

    Android still dominates the low-end market, and if Apple introduces its own low-cost competitor, that will only worsen Nokia's opportunity here. 

    Hope that helps your understanding! Thanks for the note, Christopher!  

  • Christopher

    I don't think you pay attention to Nokia's stock performance, so let me tell you my experience.

    Back in July 2012, I bought 1,000 NOK shares at $1.80. One year later, it's sitting at $4.03. In Q3 2012, NOK announced they had sold 1.9 million Lumias. During their last earnings report (Q2 2013), NOK announced 7.4 million Lumias sold.

    No matter how you look at WP8's marketshare, Nokia has experienced excellent year-over-year growth between 2012 and 2013. Stockholders who bought in 2012 are happy with their investments. 

    The real worry isn't the Lumia line. 

    The real worry is whether the Asha line can stall the drop in featurephone sales long enough for Nokia to stabilize revenue with its new wholly-owned Nokia Networks division.

    Hence, you've lost the forest for the trees. Nokia can't — and shouldn't — challenge Apple and Samsung on the high end. Nokia *should* claim the sub-$250 zone as their own. This is a place where Apple cannot compete, and where Android devices are not optimized.

    The Lumia 1020 is great at developing buzz and headlines, but if you read the last Q2 earnings report, you'd know the real growth is happening with the Lumia 52x, 62x, and 72x lines.

  • photog

    you really should try the nokia lumia 1020.  the camera is great and so are the microphones, the screen, the design, the quality, the here maps, here transit, microsoft office with excel, powerpoint and the rest of the suite.  the free nokia music is great and the city lens is great as well.

  • acarr

    I have -- I've been testing out the 1020 personally. And I've been testing our past iterations of the Lumia for years now. All of the features you referenced--the maps, transit, screen, as well as the world's best camera (though not at 41-megapixels)--were available in last year's 920. 

    It's unclear to me what is the selling point for this point, compared to those of years past.

  • Pino

    Hi Austin, I'm Pino from Nokia.
    Because I'm part of the HERE team, I can tell you that all the location experiences are updated over time, so nothing is the same as one year ago.
    On the smartphone side, we clearly have a portfolio. Introducing the Lumia 1020 doesn't mean that the Lumia 928 is obsolete: they're two different devices for two different people.
    But most importantly, when it comes to the camera of the Lumia 1020, the difference is between being able to shoot a photo or not. It's as simple as that.

  • acarr

    Hey Pino, thanks for the note. Let me put it another way:

    Instagram: 100 million users
    Hipstamatic: 4 million users

    So which app are you likely to have more success with? One of the most popular mobile photo-sharing apps in the world? Or Hipstamatic's new app, Oggl, which has far less users than Hipstamatic's original app? 

    You'll likely say that Oggl photos can be shared to Instagram...but that's still not the same as using Instagram. (It's the reason why people still love using Instagram on their iPhone, even though Oggl is also available on iOS.)

    Then again, perhaps they'll just love using the Nokia Pro Cam or the Nokia Smart Cam (can't wait for average consumers to figure out the difference), or PhotoBeamer, or Photos...right?
    Lastly, you say the location experiences are updated all the time, which includes the experiences on both the 920 and 1020. So no difference between the two on that front, as the software is continuously updated. Thus I'm still curious: What's changed since a year ago? Nokia boasted then that it had all these same features, plus the world's best smartphone camera. Now you have introduced essentially the same phone, with a more powerful camera. What's changed? You're going to market the world's best smartphone camera again this year? Did that work with the 920?