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Both the 920 and 820 will be available in several colours, including bright yellow and “lipstick red.” While some might say a yellow phone is gaudy, it’s an idea whose time may have come. After trying it out, I felt like I was holding a little Lamborghini in my hand.Peter Nowak/The Globe and Mail

For Nokia, the question of who will win – or even survive – the raging smartphone war comes down to a matter of optics. Literally.

The struggling Finnish company on Wednesday introduced its new smartphone flagship, the Lumia 920, built around a high-end camera and screen. The company, which has seen its once-dominant position in cellphones usurped by the likes of Apple and other manufacturers running Google's Android software, believes this focus on imagery will differentiate its efforts from competitors.

"People are going to be buying these phones and not using the phone, just the camera," said Kevin Shields, senior vice-president of Nokia's Windows program, after the press event in New York. "They're going to be home runs."

Boasts aside, there were some sour notes for investors and consumers: The company didn't provide launch dates or pricing for its phones, saying only that they'll be made available in select markets during the fourth quarter of 2012.

And Nokia also didn't share much information about Microsoft's new operating system. The software company is saving those full details for its own upcoming event.

The good news for Canadian fans is that Nokia says the phones will have pentaband radios that run on both LTE and HSPA+ networks, which should be compatible with most Canadian wireless carriers.

The 920 and the 820, a lower-end Lumia model also introduced at the event, will run Microsoft's upcoming Windows Phone 8 operating system which, like the current Windows Phone 7, separates itself from aping Apple's iOS and or Google's Android with a tile-like interface. Rather than scrolling horizontally through a grid of apps, users instead flick vertically through coloured tiles, some of which are animated.

The 920 is indeed capable of some nifty photographic gymnastics. It has an 8.7-megapixel camera with built-in image stabilization, which allows it to capture more available light and therefore reduce shake distortion. During the keynote address, Mr. Shields showed off photos taken at night – without a flash – that displayed high levels of detail and very little motion blur.

In demos after the event, Nokia staff put the stabilization capability through its paces. With the camera button pressed halfway, the phone focused on its subject and held steady even while being shaken slightly. Having taken more than my share of dark and blurry cellphone photos, I couldn't help but be impressed. In my short exposure to it – pardon the pun – it looked like the best phone camera I've encountered, with the possible exception of the iPhone 4S.

The Windows Phone 8 operating system will also feature "third-party lenses," a sort of on-screen menu of filters, camera apps and other effects that can be called up while taking any photo. Other smartphone operating systems allow third parties such as Facebook and Twitter to integrate with the device's camera, but Microsoft's system will put those apps right into its "viewfinder." You won't have to flip between apps and the camera, which can save valuable seconds when you're trying to shoot and share something timely.

One such lens, Cinemagraph, allows for the quick creation of animated GIFs, an online phenomenon made of a string of photos stitched together that come alive into a sort of short movie. The phone shoots 60 frames per second, then detects and highlights areas where movement occurs. The user then has the option of keeping those sections or erasing them from the master photo. It's an ingenious way of not only creating animated photos, but also eliminating the possibility of having shots spoiled by people walking through them.

The 920 also features a 1280-by-768-pixel Pure Motion HD+ display, which Shields said is "better than HD." While many phones have super-fast processors, their displays often can't keep up with the images being rendered, which can result in flickers or lag. Mr. Shields claimed some "Finnish Judo" tech let Nokia embed memory in the actual display, which enables the crystals to work faster and therefore run higher-end graphics, The effects are noticeable, with the flagship Lumia having one of the crispest displays I've seen.

Nokia's third differentiator is also its most obvious: bright colours. Both the 920 and 820 will be available in several colours, including bright yellow and "lipstick red." While some might say a yellow phone is gaudy, it's an idea whose time may have come. After trying it out, I felt like I was holding a little Lamborghini in my hand.

Other than features relating to optics, the 920 will also have built-in wireless charging and near-field communication technology. Audio device manufacturer JBL will have several sound-dock accessories that make use of both functions – you can lay your phone down on top of the device and have it wirelessly charge and play music at the same time. The NFC feature will also figure into wireless "wallet" payment systems being rolled out by retailers.

The 820 will have many of the same capabilities as the higher-end 920, except that its display will be "slightly less than HD," Mr. Shields said. The 820 also won't have built-in wireless charging – that can be added through an optional removable shell, which will cost extra. The 820 also doesn't have the 920's image stabilization.

So is a solid camera, sharp display and glossy colours enough to stand out against the competition? So far, it hasn't been, with Microsoft and Nokia gaining less than four per cent market share with Windows Phone 7.

Some analysts believe there is room for a third player to Apple and Android, with Windows being the most likely candidate.

That said, a credible Windows Phone ecosystem could be deadly news for Canadian BlackBerry maker Research In Motion.

"A developer today is going to build for Apple for publicity, they're going to build for Android for volume and they're going to build for Microsoft because they'll probably fund them," said Gartner analysts Ken Dulaney. "RIM, no matter what they do, is going to be in fourth place."

Other analysts were initially less than impressed with the Lumias. Nokia's shares plummeted 15 per cent shortly after the unveiling, to 1.94 euros.

The Finnish handset maker has logged more than 3 billion euros in operating losses in the past 18 months, forcing it to cut 10,000 jobs and pursue asset sales.

Its share of the global smartphone market has plunged to less than 10 per cent from 50 per cent during its heyday, before the iPhone was launched in 2007.

With files from Reuters