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I'm a Nokia 701 owner over 6 months now. It is a great device in almost every aspect. But it puzzled me why it can't play 1080p videos when it's hardware is more than capable ( Broadcom's BCM2763 with Videocore 4 engine). Was hoping the phone would get this functionality with FP1 update, but no.
Now, I paid quite an amount of money for this phone and I didn't go Galaxy S II way at the time (which is fully capable to play 1080p). Nokia 808 PV has the same hardware and no software restrictions for 1080p playback. It is clear that only someone's decision and software restriction is preventing 1080p playback on Nokias 603, 700 and 701.
I respectfully request that the next software update allows the same 1080p playback on these devices as it is done on 808 PV.
Before someone says that 1080p or even 720p resolutions are an overkill on phone's display (in terms of picture size, they are), I'll state that I have a 32GB mSDHC card and a lot of 720p and 1080p videos 100MB-1.5GB that I want to watch on my phone (I often travel) without having to reencode them.