It improves on its predecessor, the Nokia 808, by coupling a 41-megapixel 2/3-inch BSI sensor with optical image stabilization (OIS) and a high resolution f/2.2 all-aspherical 1-group Carl Zeiss lens.

[12][13] A prototype codenamed McLaren (previously leaked as Goldfinger) was planned to be the successor to the 1020, but was cancelled before official launch.

It is the combination of a 1/1.5" large, high-resolution 41 MP image sensor with high performance Carl Zeiss optics.

It also has an adjustable shutter speed of up to 1/16,000 s. Some reviewers have noted the camera may exhibit lens flare[15][16] and minor white balance issues under particular circumstances.

Optical image stabilisation — includes new type of barrel shift actuator, which enables moving a heavy and complex full-lens assembly.

Providing "swipe-able" dials in a concentric ring display, settings such as exposure level, white balance, shutter speed and film ISO can be adjusted "on the fly" to enable changes to be visualised before a shot is taken.

Nokia hope to bring professional camera settings, once the preserve of experts, to the masses and encourage experimentation and learning using built-in tutorials.

[24] Brian Klug from Anandtech stated: "I think it's fair to say that once again Nokia has basically set the bar for the rest of the smartphone imaging world – in terms of both hardware and software features.

"[25] Chris Finnamore from Expert Reviews wrote: "Simply stunning photos make the Lumia 1020 the ultimate cameraphone.

[27][28] Erin Lodi of Digital Photography Review wrote: "Despite the lower lighting level, the Nokia is able to out-perform its rivals by a healthy margin.

[29] Dan Nosowitz from Popular Science wrote: "Nokia's new Lumia smartphone has amazing hardware (especially its unprecedented 41-megapixel camera).

Nokia's sensor and lens advances must be paired with a CPU and image processor fast enough to make shooting effortless, and Windows Phone's creative app gaps need to be filled in.

[36] Some Lumia 1020 users have reported instances of rapid battery drain and overheating, random reboots or freezes, poor voice call quality or Wi-Fi drop outs.