Having used the Nokia Lumia 521 phones for about 10 months, I was ready for a change. While the phone worked ok, it was a bit slow to respond to command, especially after the Windows 8.1 update. Plus I know that it didn't support 4G LTE and the battery life was a bit too short.
The phone was otherwise solid. We have had 3 of them in our family and they worked well for 10 months, even though I dropped mine several times and we are constantly spending time at the beach where the sand gets into phones all the time.
The Lumia 521 is a T-Mobile version of Lumia 520. We were using them on the T-Mobile network. This model is now being replaced by a cheaper Lumia 530, which is worse than the older 520/521 in a few ways. It also has a 4-inch screen. Although it is faster, it has no dedicated camera button, no autofocus in the camera, no light sensor and worse display colors. It still doesn't support 4G LTE. That's quite a few "no"s.
My 521 already had the Windows 8.1 update with Cortana, etc so no improvement was expected there.
Nokia Lumia 635
Lumia 635 on the other hand is an improvement on the 520/521 in almost every way. And this is why I now bought it for myself.
The new phone feels better in your hand, Buttons on its side have better tactile response. And navigational buttons that are now located on the screen rather than below it are somehow easier to use.
It has a larger 4.5-inch IPS LCD screen with 480x854 resolution. While the pixel density is still pretty low at 221 ppi (better phones have 300+), the screen is much better than that of the 530/520/521, because it has Nokia's ClearBlack technology, which makes colors more vibrant and contrast better.
4G LTE Speed
Unlike the 520/521/530 Lumias, the 635 supports full 4G LTE speeds. "LTE" is displayed in the upper-left corner when in LTE reception area. And in conjunction with the 4-core processor (520/521 had two cores), it transforms web browsing experience.
The Nokia 635 is very responsive, unlike the 520/521. I saw benchmarks that measured its speed at over double that of the 520, but even subjectively it is very noticeable.
The dedicated camera button is gone, but unlike 530, the autofocus remains. And pictures look a little better than both 520/521 and 530. There is still no flash and no front-facing camera, so no selfies or Skype video calls.
In short, it is noticeably better.
iPhone 5 and iOS 8
Interestingly, the my Nokia 635 with Windows 8.1 and Cortana is better than the iPhone 5 (with iOS 8 on it) in a few key areas of performance. It has better WiFi reception when far away from the WiFi router, better text scaling and better internet video playback quality. That is in addition to being several times cheaper and using a standard USB cable for charging and no need to install iTunes bloatware.
I like my new Lumia 635 much better than the 521. The major differences include a larger, more vibrant screen at 4.5 inches vs 4 inches on the 521, longer battery life, faster 4G connectivity, more responsive operation through the faster 4-core Snapdragon 400. While it still has some of the shortcomings of the 521, such as a lack of flash or front-facing camera and even a new one: the dedicated shutter release button for the camera is gone.
Still, it was a great upgrade and I am happy with it, especially since it was less than $100. It will not rival any iPhones when it comes to most features, but the iPhones are $400-600 more. And Android phones are more vulnerable to viruses, so I am not even considering those.