Nokia on Thursday introduced a new smartphone, the Lumia 1020, with a powerful 41-megapixel camera as it tries to catch up with rivals Samsung Electronics Co Ltd and Apple Inc.

The Finnish mobile phone maker is betting its future in smartphones on Microsoft Corp's Windows Phone operating system as well as on high-tech photography features.

At an event in New York, Nokia Chief Executive Stephen Elop emphasized the Lumia 1020's advanced optics, which enable sharper images, even when zooming.

"You can literally find a needle in a haystack," Elop said.

The new Lumia, which uses Windows software, will be sold through U.S. carrier AT&T Inc starting July 26 for $299.99 with a two-year contract, and will be available later in other markets including China, Nokia said.

Telefonica SA will be its carrier partner in European and Latin American markets, it said.

Elop said Nokia, which has suffered a fall in cash reserves after years of poor sales, was pooling resources with AT&T and Microsoft to market the new phone.