In late March 2012, the tide seemed as though it was about to turn for Microsoft’s (MSFT) Windows Phone platform. After a year and a half of struggling, the “first real Windows Phone” was about to launch in early April and change the smartphone landscape forever. People got excited. I got excited. After waiting so long for a true third player to emerge, this was it. The surprisingly affordable Lumia 900 flagship phone was released by AT&T (T) on April 8th and it was initially free for new subscribers or $99 for AT&T customers. What a deal! The phone was gorgeous, unique, fast and fresh, presenting a genuine alternative in an industry dominated by two behemoths. But no one cared.

That’s not entirely fair. Some people cared. In Nokia’s second-quarter report, the company revealed that it sold a grand total of 4 million Lumia smartphones into retail channels during the Lumia 900’s debut quarter — globally. Shipments of this awesome new smartphone, plus channel sales of every other Lumia model around the world, totalled 4 million units. In the U.S. where the Lumia 900 was a highly anticipated AT&T exclusive, Nokia (NOK) shipped a total of 600,000 smartphones.

To put those numbers in perspective, Samsung (005930) shipped 10 million Galaxy S III smartphones during the phone’s first 60 days of availability and Apple (AAPL) sold 5 million iPhone 5 handsets in just three days.

The “first real Windows Phone” was a bust.

Now, here’s where things get complicated. Nokia was banking on Windows Phone to reverse its heartbreaking downward spiral. The once-great cell phone giant was now losing more than $1 billion each quarter and Windows Phone was the platform that was supposed to save it. Combining Nokia’s hardware and services expertise with Microsoft’s software prowess certainly made sense on paper, but the end result just couldn’t cut it with consumers.

So what did we learn from this painful ordeal? The unfortunate truth was that gorgeous hardware, fresh new software and a unique user experience simply aren’t enough to shift eyes away from the market leaders and onto a third player. Nokia might have learned the same lesson when it launched the Lumia 800 in November 2011, but apparently it took one more try for the message to really sink in. Right?

Fast forward to November 2012, and Nokia is getting ready to launch a brand new Windows Phone that it hopes will finally be the breakout hit the Finnish cell phone maker so desperately needs. And what is Nokia touting this time around as the key selling points that will help its new smartphone find success in a market still dominated by the same two players? Gorgeous hardware, fresh new software and a unique user experience. Just like the Lumia 800. And the Lumia 900.

Third time’s the charm?

The Inside

Nokia’s Lumia 920 is among the first Windows Phone 8 handsets and as such, it supports multi-core processors and other upgraded hardware. A dual-core Qualcomm Snapdragon S4 processor clocked at 1.5GHz powers Nokia’s new handset, and 1GB of RAM helps keep performance smooth and snappy. Nokia also included 32GB of internal storage and a 2,000 mAh battery that easily got me through a full day with moderate usage.

Where connectivity is concerned, the Lumia 920 is packed to the brim. Bluetooth 2.1 +EDR, NFC, Wi-Fi and microUSB 2.0 connectivity are all on board. In terms of cellular support, Nokia managed to pack 11 different bands into its new Lumia: GSM 850/900/1800/1900, WCDMA 850/900/1900/2100 and LTE 700/1700/2100 are all supported. The Lumia 920 can handle download speeds of up to 42.2Mbps via HSDPA and 100Mbps over LTE networks.

I covered some of my favorite things about Windows Phone 8 in my recent HTC Windows Phone 8X review so I won’t bother repeating myself. The new Lumia 920 ships with a number of extras though, and they help distinguish Nokia’s offering from other Windows Phones.

Among the included Nokia-branded apps are Nokia City Lens, which helps users find restaurants, hotels, attractions and other things in their immediate area; Nokia Drive+, the firm’s fantastic voice-guided navigation service; Nokia Music, which allows users to stream music stations for free or purchase and download tracks or albums; and Nokia Maps, which is just like Apple’s iOS Maps application except it works.

The Lumia 920 also ships with several AT&T-branded apps cluttering it up but they can all be uninstalled, no doubt thanks to some serious negotiating on Nokia and/or Microsoft’s part.

The Outside

Nokia’s high-end Lumia lineup may feature one of the most unique hardware designs we’ve seen on a smartphone in recent years. Even Apple’s lawyers singled out a Lumia phone as the perfect example of a unique smartphone that does not copy Apple’s protected designs. Of course the Lumia 920 marks the third time we’ve seen the same design on a flagship Nokia phone, so the look is slightly less novel than it was 12 months ago.

The face of the Lumia 920 is black plastic covered by Gorilla Glass 2.0. The phone’s 4.5-inch PureMotion HD+ display has three capacitive Windows Phone buttons beneath it — a home button with a back button to its left and search button to its right — and the ear speaker sits directly above the screen with an AT&T logo to its left and a Nokia logo to its right along with a front-facing camera.

The curved right side of the Lumia 920 holds a volume rocker, a power/lock button and a dedicated camera button, and the left side is bare. The bottom of the phone is home to a microUSB port, a microphone and a speaker, and the top includes a secondary mic for noise cancellation, a concealed SIM card slot and a standard 1/8-inch audio jack.

The back of the phone carries only an aluminum plate bearing Carl Zeiss Tessar branding, the rear-facing camera and a dual-LED flash. And the camera, as it turns out, is a perfect lead into the next section of this review.

The Upside

Wow.

Nokia was once the undisputed leader when it came to smartphone cameras. There wasn’t even really any competition. I remember the first time I examined pictures taken by the xenon flash-equipped Nokia N82 and thinking to myself, there’s no way camera phones will ever get better than this.

Of course, that clearly ended up being a Charles Duell moment for me because cameras on smartphones have gotten exponentially better since 2007 when the N82 launched. Now, in 2012, the camera on Apple’s iPhone 5 is often the standard by which other smartphones are measured. While Apple’s camera may or may not be the best in the business, Nokia’s new Lumia phone definitely gives it a run for its money.

The 8.7-megapixel PureView camera on the Lumia 920 is exceptional in low-light situations, as Nokia claims. The F2.0 aperture, high-quality Carl Zeiss lens and dual-LED flash combine to capture point-and-shoot quality images in moderately low light. They’re not almost as good as pictures captured on a dedicated point-and-shoot camera, they are as good. In this area, the Lumia 920 puts the iPhone to shame.

In daylight, interestingly, the playing field is leveled. I found that some images captured by the iPhone 5 in daylight were sharper than similar shots taken on the 920, though the 920 is certainly no slouch. Playing with scene modes and other settings also helps tremendously, both during the day and at night. The new Lumia includes six scene modes (Auto, Close-up, Night, Night Portrait, Sports and Backlight), adjustable ISO settings from 100 to 800, adjustable exposure value and five different white balance settings.

Complementing the phenomenal PureView camera on Nokia’s Lumia 920 is the display. Nokia calls it PureMotion HD+ — I call it awesome. This exceptional panel packs 1,280 x 768 HD resolution into 4.5 inches of real estate, yielding a pixel density of 332 ppi. But that’s just the tip of the iceberg.

Blacks are deep and the contrast on this screen is outstanding. Colors definitely pop, though they seem a bit oversaturated at times, and I find that Nokia delivers on its promise of a display that is much more visible in sunlight than the average smartphone panel, as well. Also incredibly handy is the fact that the touchscreen still responds when the user is wearing gloves. After more than a week without power as temperatures in the Northeast continue to drop, this is a feature I sincerely appreciate.

The hardware itself is also a bright spot for Nokia. Once you get past the fact that the Lumia 920 weighs about as much as a small tractor-trailer and is nearly as thick as a tree trunk, this phone is as solid as they come. I will note, however, that the review unit Nokia sent me in red has a glossy finish like the white Lumia 900 did. I far prefered the matte finish of the cyan and black models, which looks and feels much better and doesn’t show oils like the glossy finish does.

Nokia’s latest flagship phone also shines when it comes to performance. It’s not the quickest draw in the West but compared to Windows Phone 7 and 7.5 devices, performance is dramatically improved.

This is thanks in large part to the latest version of Microsoft’s mobile software. As I noted in my review of the HTC Windows Phone 8X, performance issues that have plagued Windows Phone are less severe in this latest build and while my Lumia 920 review unit did not have final software installed, the performance benefits still shine through. Stock apps fly on the Lumia 920 and well-made third-party apps show marked improvement despite not yet being optimized for Windows Phone 8.

Poorly made apps still perform poorly, of course. And sadly, that applies to a huge portion of the 100,000 apps Microsoft currently has in its app store.

The Downside

In the smartphone market, first impressions can mean everything and the unfortunate truth is that the Lumia 920 doesn’t make the best first impression.

From across the room, the Lumia 920 definitely attracts attention and the various loud colors Nokia is offering are sure to draw a crowd in any carrier store. Once the peacock’s feathers have done their job and attracted interest though, that’s where the trouble begins.

As I subtly hinted at above, the first thing you’ll notice upon picking up the Lumia 920 is that it weighs a ton. At 185 grams, Nokia’s new flagship phone is even heavier than the monstrous Galaxy Note II despite the fact that Samsung’s phablet is 16% taller and 14% wider than the 920.

The next thing you’ll notice is that the Lumia 920 is surprisingly thick. In fact it’s 14% thicker than the Galaxy Note II, 20% thicker than the HTC (2498) One X, 24% thicker than the Galaxy S III and 41% thicker than Apple’s iPhone 5.

So, in a market where high-end phones are getting thinner and lighter, Nokia’s new Lumia 920 is heading in the exact opposite direction. It’s thicker and heavier than every other flagship smartphone on the market, and though it is slightly thinner than the Lumia 900 it replaces, it’s still 16% heavier.

And I include the Lumia’s wireless charging feature with this gripe.

Like NFC, wireless charging is a terrific feature on paper. The thought of walking into your home or office and dropping your smartphone on a pad to charge it is certainly appealing. When the technology isn’t supported anywhere yet and you have to buy one of Nokia’s wireless charging plates for each location you hope to charge the phone — or carry a charging plate with you along with a separate power adapter since it does not have a standard microUSB charging port — the feature becomes far less useful.

In fact, wireless charging in the Lumia 920 is actually a burden. Why? The wireless charging coil Nokia included in the phone adds even more thickness and weight to a phone that is already too thick and too heavy.

The Bottom Line

History may be repeating itself, I’m afraid.

Nokia’s Lumia 920 is a wonderful smartphone in some ways and a heartbreaking handset in others — just like the Lumia 900 that came before it, and just like the Lumia 800 that launched ahead of the 900. Smartphones powered by Microsoft’s mobile platform also have an app problem that isn’t going away any time soon.

During its Windows Phone 8 launch event, which took place last week even though Windows Phone 8 still hasn’t launched, Microsoft exclaimed that 46 of the top 50 apps on rival platforms will soon be available for Windows Phone. Yes, that’s 46 of yesterday’s top 50 apps. How many of tomorrow’s top apps will be available on Windows Phone in a timely manner? There’s no way of knowing.

Compounding matters is the fact that many popular apps that do come over to Windows Phone from other platforms have performance and usability issues, as I have mentioned previously. Apps on other platforms also offer far more comprehensive experiences in many cases compared to their Windows Phone counterparts. Sometimes it’s the developers’ fault and sometimes issues are brought about by platform limitations, but in the end it really doesn’t matter. The users suffer either way.

I hope the situation will improve. Windows Phone 8 offers developers new tools to build apps and games using native code, and the results could be great. Porting apps from other Microsoft platforms should be a breeze now thanks to shared code and there are tremendous opportunities for unique apps and games that offer an integrated experience across platforms.

Will it happen? I don’t know. When will it happen? I can’t say.

In the meantime, we’re in a holding pattern. I’ve said it before and I’ll say it again: Windows Phone is an outstanding platform and vendors like Nokia and HTC are building gorgeous handsets powered by Microsoft’s mobile operating system. Apps are still a huge barrier though, and more importantly, there is still no differentiation compelling enough to pry people away from Android and iOS.

This carries over to first-time smartphone buyers as well, of course — subscribers moving up to a smartphone from a feature phone are unlikely to choose a Windows Phone when everyone around them carries an Android phone or an iPhone. It’s a catch-22 in the purest sense of the expression.

While Nokia and AT&T haven’t yet announced pricing, I’m hearing the Lumia 920 will undercut the competition yet again by at least $50. And once again, we’ll see some serious advertising showing off this great new phone. What we still won’t see, sadly, are truly compelling reasons to buy the Lumia 920 over a market leader. And we also won’t see truly compelling reasons to buy into the Windows Phone ecosystem over Android or iOS.

The Lumia 920 is a great smartphone. It has its faults, and you might have to hit the gym a few extra times each week in order to lift it, but it is still a great smartphone. The design is unique and sharp, the performance has improved dramatically from earlier Windows Phones and the camera is amazing. Does that add up to an experience that outweighs the platform’s many limitations? For the majority of consumers, I don’t think it does.