Lumia 803 and Lumia 930. Source: Nokia. 

Microsoft's (MSFT 1.65%) Windows Phone updates can be a little confusing. Windows 8.1, Update 1, Lumia Cyan, and now Lumia Denim are all available and debuted relatively close together as far as updates go. Still, Microsoft should be congratulated for trying to keep its software on the cutting edge, even if they all appeared a little late and are a tad disjointed.

For Lumia owners, the forthcoming Denim could bring some significant changes, and will attempt to bring Microsoft's Windows Phones closer to its competitors.

What's changing
According to Nokia's website (which, by the way Microsoft, confuses the whole the branding thing) here are the biggest changes coming with Lumia Denim:

  • Lumia Camera: Say goodbye to the Nokia Camera. Microsoft is rebranding the app as 'Lumia Camera' and making it faster to boot. The app can now snap one pic every 42 milliseconds -- so basically, no more pictures with your eyes closed.

  • 4K recording in your hand: Denim adds ultra HD 4K video recording at 24 frames per second. Users can also save 8.3 megapixel individual frames as high-resolution images.

  • More camera love: Automatic high dynamic range (HDR) and a Dynamic Flash have been added to the feature set, so pictures can be adjusted on the phone after they're taken. Improved algorithms make low-light photos even better.

  • Cortana on alert: Cortana is always listening with Lumia Denim update. Just say "Hey Cortana" and the personal assistant is ready to go. This feature needs hardware that only the Lumia 1520 and 930 have though.

  • Get more from a glance: Some Lumia's get a Glance Screen that offers more detailed Bing Weather, Bing Health and fitness info, notifications, and app data.


Lumia Camera app. Source: Nokia.

Unfortunately, not all Lumias will get the new update. Microsoft (or was it Nokia?) said the new camera features will only work with the Lumia 930, Lumia Icon, and Lumia 1520. The update will also ship with the new Lumia 830, Lumia 730 Dual SIM, and Lumia 735, and hit the rest of compatible Lumia phones later in the fourth quarter. 

Why update the Lumias?
Microsoft just closed its acquisition of Nokia earlier this year, and it's fighting hard to improve its smartphone position. Right now, Windows Phone only accounts for about 2.5% of global smartphone operating market share, and that's down from a high of around 3.4% about a year ago.

The updated Lumia Camera will add better features to help distinguish itself against Apple's (AAPL 0.64%) iOS and Android phones, but it's doubtful it'll be enough to truly set itself apart. The iPhone camera is the most used camera in the world, according to Apple, and that's achieved without the very best camera specs on the market.

The Cortana update seems a bit more promising, as Microsoft's personal assistant will listen more consistently than Apple's Siri, putting it more on par with Google's Android. With iOS 8 looming, Siri will soon respond to voice activation without holding down the home button, but to save battery life Apple's assistant will only listen in when the device is plugged into its charger. That may give Cortana a small edge over Apple, though Google Now and Google Search on Android are likely the most responsive out of all three.

With Microsoft's current market share position, the new Denim update is a welcomed move, but I don't think it's going to be enough to convince users that Lumia is the way to go. With iOS 8 and new iPhones set to debut this week, and Samsung releasing a host of new devices last week, Microsoft needs more than just a minimal update to its flagship line to make a dent in the smartphone market.