The two new smartphones, described as unexceptional by one analyst, will go on sale in key European markets by the Christmas holiday season and are the first plank in a strategy designed to return the Finnish giant to its former glory.
The top-end Lumia 800, featuring easy access to social networks like Facebook and high-definition video playback, will sell for about 420 euros ($584) excluding subsidies, less than Apple's latest iPhone but more than many Google Android phones.
It will also offer the full and free navigation service users crave.
The more basic Lumia 710 will cost about 270 euros.
"These devices are a good start but the reality is that they are pretty much plain vanilla Windows Phone products," said Ben Wood, director of research at UK-based telecoms analysis firm CCS Insight.
"These products are a positive start but it remains a Herculean task to recapture this lucrative market from Apple and Android."
Nokia, which has been left in the dust by Apple and Google in the booming smartphone market, decided to ditch its aging Symbian platform in favour of Microsoft's software in a risky deal that spooked investors in February.
The world's biggest cellphone maker said it would address the crucial U.S. and mainland China markets with new products next year.
Nokia also unveiled four new basic phones for emerging markets, where it still holds a leading position.
Nokia's market value has halved since February as investors are unsure whether it can ever regain the market share it has lost.
Its third-quarter results beat low expectations, sparking hopes that the company can survive a painful revamp, but smartphone sales still dropped 38 percent from a year ago.
The annual Nokia World media and industry event in London where the launch took place on Wednesday includes speakers from the world's largest carriers: China Mobile, Vodafone, Orange and MTN. ($1 = 0.719 Euros)