Why Nokia’s Lumia Sales are Sagging

Sales of Nokia's NOK1V.HE +1.00%Windows-powered Lumia devices, its flagship smartphone, fell quarter-over-quarter to 2.9 million units in the third quarter this year from 4 million in the second quarter. This is worth noting given that the Lumia 900, its current smartphone, is relatively new.

That number is already pretty bad, considering that Google GOOG -8.01% activates around 1.3 million devices running its Android mobile operating system every day, if Google’s Android chief Andy Rubin is to be believed. Nokia said it sold just 300,000 Lumia devices in the North American market in the quarter.

However, the Lumia 900 had a fatal flaw: The screen resolution was nowhere near as crisp as the rest of the phones on the market, making the phone literally look obsolete next to even last-generation iPhones and newer Android-powered devices.

Nokia’s next smartphone, the Lumia 920, which comes out later this year, is a different story, and it’s enough to get consumers looking for a Windows-powered smartphone to wait until its launch.

The Lumia 900 had a resolution of 800 by 480 pixels for a 4.3-inch phone. The 3.5-inch iPhone 4S had a resolution of 960-by-640-pixels, while the  4-inch iPhone 5 has a resolution of 1136 by 640 pixels.

The new Lumia 920′s 4.5 inch display has a resolution of 1280 by 768 pixels, giving it that “crisp” look that the phone needs to go toe-to-toe with the iPhone. It also sports improved hardware, including a new camera that is considered by many to be among the best.

While the Lumia 900 sported some impressive guts, it wasn’t able to compete when it came to display — which is arguably the most important part of the phone, given it’s what consumers are looking at nearly 100% of the time they are using the phone. A high-resolution display was one of the main differentiating points of Apple’s new smartphones when it released the “Retina” display — and promptly began shipping it in its other products like the iPad and MacBook Pro computers.

The Lumia 900 was unveiled earlier this year, but shortly after coming out took a price cut to remain competitive with other phones. But with Nokia unveiling a new Lumia partially into their most recent quarter in early September, it’s not surprising that many consumers eyeing a Windows-powered smartphone would want to hold out for a phone that will feel more in line with other top smartphones like the Galaxy S3 and the iPhone 5.

Given the current specifications of the Lumia 920, a Windows Phone user seems more likely to wait an extra month to November, when the phones are available for purchase in November.