In 2004-5, Nokia lost significant handset market share. This was attributable in part to its late adoption of clamshell-format handsets.
But at the time, a secondary factor I identified was a slow adoption of the (at the time) leading-edge QVGA 320x240 pixel screens. Nokias high-end phones (9xxx Communicators excepted) were hamstrung by the early versions of Symbian OS, which mandated a 208x176 pixel screen.
This meant a visible difference in screen quality between high-end Nokias and competing devices from SonyEricsson, Samsung, HTC and others. Screen quality is one of the most noticeable indicators of "quality" to consumers after the external aesthetics of the phone.
Nokia tried to move its range to a "double resolution" but non-standard 352x416 pixel display on products like the E60, but has subsequently reverted to QVGA for most of its devices. Even its new N96 flagship is still sporting a 320x240 screen.
Meanwhile, there is a slow but inexorable move towards much larger formats - capable of rendering PC-grade web pages. Some phones in Japan have had VGA (640x480) screens for two years already. A number of high-end Windows Mobile phones from HTC and others have also sported VGA displays for a while.
And more recently, we've had the iPhone (480x320) - and as well as the multitouch capabilities, this generates a significant "wow" factor from users. And the other day I had a quick play with the new SonyEricsson Xperia X1, which has a screen which is physically smaller than the iPhone's, but crams in 800x480 pixels, showing incredibly fine detail. HTC has just announced the "HD" version of its Touch handset with a similar screen. And unsurprisingly, various phones in Japan have been there for a while already.
Now to be fair, the Nokia N800/810 tablet and E90 communicator both already have similar resolutions.... but in terms of consumer-type phones intended for web & media usage.... we're still waiting.