Microsoft has officially announced its third update for Windows Phone 8, which brings new features such as support for large HD displays, more powerful hardware and other.

The company has announced that its Windows Phone GDR3 update will begin rolling out over the next few weeks. The GDR3 update adds several enhancements and features to Windows Phone 8 smartphones. The software adds support for devices with 5- to 7-inch displays and now Windows Phone handsets will also boast 1080p Full HD displays.  This will allow Windows Phone to compete with Android phablets such as the Samsung Galaxy Note 3 and HTC One Max. Just like the latest Android smartphones, Windows Phone will get more powerful since it will now be capable of using the latest Qualcomm Snapdragon processors.

The GDR3 update comes just in time for Nokia to announce its first phablet, the Lumia 1520. The company is expected to announce the super-sized smartphone and a Lumia tablet that will run Windows RT 8.1 at Nokia World later this month. The software update puts Microsoft on a more level playing ground with Google, since Windows Phone licensees can now use the same high-end specs found in rival Android handsets.

Microsoft has updated its Windows Phone blog with more information on what users can expect from the GDR3 update.

Support for bigger, higher-resolution screens

The update paves the way for future Windows Phone devices with 5- and 6-inch touch screens. The larger, 1080p HD displays on these devices will make Windows Phone even more personal-for example by sporting jumbo-sized Start screens with room for six Live Tiles across it instead of four.

A bigger Start screen means the ability to pin even more of the people, info, and apps that matter to you. Built-in apps and Hubs such as email, Photos, People, and Music and Videos will also be carefully scaled to take full advantage of the additional real estate on 6-inch screens.

More powerful hardware

In addition to larger screens, Update 3 will also bring support for the Qualcomm Snapdragon 800 quad-core processor. The added horsepower that this chip delivers should make our already-fluid operating system perform even better.

Driving Mode

A new feature called Driving Mode helps you get from point A to point B with fewer distractions. Working with a connected Bluetooth device, Driving Mode is designed to limit notifications on the lock screen-including texts, calls, and quick status alerts until you're safely parked.

• More useful ringtones: With Update 3, you can use custom ringtones for more things - including instant messages, emails, voicemails, and reminders. You can also assign custom ringtones to contacts for text messages, so you'll know who's texting you without even looking.
• No more twist and shout: Does your screen keep spinning when you're trying to read emails in bed? Use the new rotation lock option to keep it fixed in place.
• Better storage management: New storage settings make it easier to free up space on your phone and manage temporary files. A new category view shows what's taking up space at a glance.
• Easily close apps: Now you can use the App switcher to quickly close apps when you're finished with them.
• Wi-Fi access out of the box: You can now connect to Wi-Fi during phone set up, so you can start conserving cellular data right out of the box.
• Enhanced Bluetooth: The team made a bunch of improvements to improve connection quality for Bluetooth accessories.

Microsoft will roll out GDR3 in the coming weeks and has announced that specific timing will be dependent upon a number of factors such as carrier and phone model.