The companies are touting the PRADA Phone by LG as a real breakthrough in the industry, describing it as the first completely touch-screen mobile phone, apparently sidestepping the fact that Apple introduced its own touch-screen iPhone just last week.

Indeed, there are numerous similarities. The PRADA Phone by LG plays music and videos on a wide, LCD screen. It has a 2-megapixel camera, eight megabytes of internal memory, and yes, it looks a lot like Apple's iPhone. The slick, button-free, touch-screen interface is particularly similar.

Randy Guisto, IDC's Group Vice President of Mobility, Computing, and Consumer Markets, isn't surprised by the comparisons. "A lot of people will say it's an iPhone rival," he tells us, because there are no other buttonless phones out there yet.

And even though the two phones share some of the same characteristics, he says, the PRADA phone is aimed at a high-end consumer, with plenty of extra cash to spend.

Cost of Luxury

"It's a PRADA phone," he says, and therefore people expect to pay a lot for it. "It's done for prestige," he adds, pointing out that the intent of high-end products like this is to build brand equity, as opposed to driving a large volume of sales.

Prestige marketing has been slowly gaining momentum in this arena over a number of years, Guisto says. "Affinity marketing has been pretty popular and we've seen it in mobile devices before."

He cites Acer's Ferrari 3000, a candy-apple-red mobile PC, as well as HP's James Bond-inspired Jornada 430se -- a handheld device which appeared in the 1999 flick, "The World Is Not Enough."

And just how much can users expect to pay for this kind of premium mobile luxury?

When it hits European stores in late February, the 12-mm thick PRADA phone (model KE850) will cost about 600 Euros (equivalent to US$780) in France, Britain, Germany and Italy.

Guisto tells us the price might deter some people, but so will the iPhone's $599 price tag.

Looking for a Break-Through

In the joint announcement, PRADA's president and CEO Patrizio Bertelli said the two companies were looking to develop a "break-through."

Rather than adding the PRADA brand name to an existing product, Bertelli explained that the two companies worked together to give their new phone a "very strong character and unique style, both in its contents and in its design."

Although Apple may have stolen the thunder from LG by announcing its own buttonless smartphone last week, the new design is innovative, nonetheless. It will be especially interesting to see whether the button-free design will be a hit with consumers, as these new-wave phones hit the street over the next year.

LG says countries in Asia, including Hong Kong, Taiwan, and Singapore, can expect the phone in late March. The Korean version is scheduled to launch in the second quarter of 2007.

There's no word yet though on when and if it will launch in the U.S.