And that's where Nokia's "re-invented zoom", better known as "oversampling" kicks in - an enhanced way of generating and cropping an image.
I don't think you've quite understood 'lossless' zoom, and have got how it works the opposite way round. The oversampling occurs more with the normal unzoomed 5 MP image than it does with the zoomed image. Here's how it works without zoom:
- Camera takes a 38 MP image, and then uses algorithms to make an oversampled 5 MP image in which several pixels from the original 38 MP image are combined to make a high quality 'superpixel'. The end results is a 5MP image created from the original 38 MP version with far more detail and precision than you'd get if you used a 5 MP sensor.
Now onto the zoom. Normal digital zoom works by interpolation, i.e. you start with a 5 MP image, digitally increase it to 15 MP (I've heard this called oversampling too, confusingly), then you take a 5 MP rectangle, move it to where you want to zoom to, and crop around that rectangle, making a 3x digitally zoomed image.
However, the 1020's 'lossless' zoom starts from the 38 MP original, and lets you take a 5 MP rectangle and move it anywhere on that massive 38 MP image, and when you crop it you get the maximum possible lossless zoom at that resolution. It's 'lossless', because no interpolation or oversampling is needed to generate additional pixels.
Perhaps that's what you meant as well, but it wasn't clear. Either way, the 1020's digital zoom tech will give results similar to an optical zoom coupled to a smaller resolution sensor.
Why am I going on about this? Comes back to my original point. Increasing the sensor resolution on the 1020 successor will mean that images can be zoomed even further and at higher quality. That's a feature I want to see, and so I disagree with people who say increasing above 41 MP won't deliver any benefit. It may not improve the unzoomed 5 MP pictures much, but it will mean pictures can be zoomed in even further without having to rely on pixel interpolation - which is what people mean when they say 'lossless digital zoom'. If this can be coupled with optical zoom, so much the better.