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Nokia shows off flagship Lumia 920, powered by Windows Phone 8

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    Nokia's flagship Lumia 920 smartphone, powered by the Windows Phone 8 operating system.Nokia

  • 1200-nokia-lumia-920-color-range.jpg

    Nokia's flagship Lumia 920 smartphone, powered by the Windows Phone 8 operating system.Nokia

  • 1200-nokia-lumia-820-red-and-yellow.jpg

    The Nokia Lumia 820, a new Window-powered smartphone.Nokia

  • 1200-nokia-lumia-820-color-range.jpg

    Nokia's Windows Phone 8 powered Lumia 820.Nokia

  • 1200-nokia-lumia-820-covers.jpg

    Colorful covers for the Nokia Lumia 820, one of a series of Windows Phone 8 smartphones released by Nokia.Nokia

Nokia has revealed its new flagship smartphones the Lumia 920, designed to run a new version of Windows for such devices -- and the market reacted by swatting down the company's stock.

Nokia's Lumia 920 can be charged without being plugged in; the user just places it on a wireless charging pod. The highlight of the device is an incredibly fancy camera. The lenses on the Lumia 920 shift to compensate for shaky hands, resulting in sharper images in low light and smoother video capture, making it one of the most remarkable out there, said president and CEO Stephen Elop.

'We view imaging as a core area for differentiation in the smartphone space. Nokia has addressed this with PureView.'

- Crawford Del Prete, Chief Research Officer, IDC

"If someone sees a picture taken with this device, compared with any other smartphone on the market -- or I dare say that comes on the market in the weeks and months ahead -- they'll be absolutely blown away by it," Elop told Fox Business.

The PureView technology used an 8.7MP camera, image stabilization and and Carl Zeiss optics to capture high quality images.

"If you're taking a picture in the middle of the night in darkness, all of the sudden you can capture images which are not blurry," Elsop said. He also highlighted augmented reality, and the screen technology in the Lumia.

"That screen is by far the brightest in sunlight conditions," Elop told Fox Business.

It's a big step for the company, which is doubling down on its bet that an alliance with Microsoft can pull the company out of a deep sales swoon. But the market appears to dislike that gamble.

Stock of Nokia Oyj, the division of the company responsible for making smartphones, was down at one point more than 15 percent in response the new-phone news, while Nokia's stock was down 11 percent.

Nokia also unveiled a cheaper, mid-range phone, the Lumia 820. It doesn't have the special camera lenses, but it sports exchangeable backs so you can switch colors.

The Finnish company revealed the new phones in New York. The American market is a trendsetter, but Nokia has been nearly absent from it in the last few years. One of CEO Stephen Elop's goals is to recapture the attention of U.S. shoppers, many of whom buy iPhones or Android devices instead.

Nokia Corp. launched its first Windows phones late last year under the Lumia brand, as the first fruits of Elop's alliance with Microsoft. Those ran Windows Phone 7 software, which is effectively being orphaned in the new version. The older phones can't be upgraded, nor can they run applications written for Windows Phone 8.

Worldwide smartphone sales, 2Q 2012

Android: 104.8 million units
Apple iOS: 26 million units
BlackBerry: 7.4 million units
Symbian: 6.8 million units
Windows: 5.4 million units
Linux: 3.5 million units
Other: 0.1 million units

Source: IDC.

Nokia sold 4 million Lumia phones in the second quarter, a far cry from the 26 million iPhones that Apple sold. So far, the line hasn't helped Nokia halt its sales decline: Its global market share shrunk from the peak of 40 percent in 2008 to 29 percent in 2011, and it is expected to dwindle further this year.

Wireless charging has shown up in other phones, most notably the Palm Pre of 2009. But Nokia is making its phone compatible with an emerging standard for wireless charging, called Qi. That means the phone can be charged by third-party devices. At the event, Nokia executive Kevin Shields demonstrated the technology by placing the phone on top of a JBL music docking station, which charged it.

The docking station also played music from the phone, even though it wasn't plugged in. The music was transferred from the Lumia's near-field communications chip, which can connect automatically to other devices at short range. Coupled with the right apps, NFC chips can also be used to pay for things in stores, by tapping the phone to credit-card terminals.

For its part, Microsoft and the Windows Phone 8 operating system will have a lot of catching up in the phone world.

Android and Apple devices dominate in smartphones, with 85 percent of the worldwide market combined, according to IDC. Companies making Android devices include Samsung Electronics, HTC Corp. and Motorola Mobility, which Google now owns. Samsung also makes phones running Bada, which is based on Linux.

The prices of the new phones, which will be available later this year, weren't immediately available.

The Associated Press contributed to this report.