LG’s KE850 won a product design award late last year from the International Forum Design GmbH, which at the same time honored Apple for some of its iPod designs.

While Apple may have beaten LG to the marketing punch, by announcing with much fanfare its touch-screen iPhone at its Macworld conference earlier this month, it seems LG will be first to market.

For sure, both companies are betting that touch-screens with just one or two hard buttons are the way of the future for smartphones. Whether these pricey devices will make a dent in the enterprise market, which currently is dominated by devices like the BlackBerry from Research in Motion and the Treo from Palm, is unlikely.

It’s far from certain whether they will even appeal to many consumers. While both devices look gorgeous, they are expensive and lack high-end functionality.

The Prada KE850 is due to launch late next month in Europe, including in the UK, Germany and Italy, followed by launches in Hong Kong, Taiwan, and Singapore in late March, then in Korean in the second quarter.

On the other hand, the iPhone is slated for its first release in North America in July, then in Europe during the fourth quarter. It will then launch in Asia sometime next year, said Cupertino, California-based Apple.

LG made no mention of a North American launch date for Prada.

LG’s new Prada phone boasts a touch interface screen measures 3 inches and, like the iPhone, takes up most of the device’s front real-estate. The iPhone’s screen is a half an inch larger, but both measure under half an inch thick.

Prada sports a 2-Mp camera and 8GB of flash memory, which is similar to the iPhone. It too plays music and videos, and supports various data forms, including ppt, doc, xls, pdf and txt.

While Prada is a tri-band EDGE device, the iPhone is a quadband GSM and EDGE device.

Prada is a little pricier with a retail tag of 600 euro, or about $777, versus $599 for an 8GB iPhone, which includes a two-year contract with Apple’s wireless provider AT&T Inc. Apple also plans to sell a 4GB model for $499.

Given these phones likely will appeal mostly to buyers who value form over function, LG was wise to partner with the Italian fashion house Prada, a label that is coveted among monied fashionistas.

LG and Prada said they worked closely together on every aspect of the product, from handset development to marketing combining the attention to detail and uncompromising quality of Prada design with the trademark technological innovation of LG mobile.

Prada helped not only to make the device look chic, but also with ring tones, pre-loaded content and accessories, such as a leather case, according to South Korea-based LG.

At least in the early stages of this new niche of smartphones, it may just come down to whether the Prada or Apple brand is cooler.