LG and PRADA have announced the release of a new designer mobile phone with a complete touch screen interface which could make some trouble for the new Apple iPhone which was unveiled earlier this month boasting a similar touch screen as a key feature.

The PRADA phone by LG (KE850) was built with the same attention to detail and quality that would be seen in other products from PRADA, and the price is in line as well. The PRADA phone will be available to customers in UK, France, Germany and Italy in late February, but of course luxury (and touch screens) don’t come cheap. The phone will retail for around 600 Euros (about $775 USD), which is almost $200 over the expected cost of the high-end iPhone.

LG boasts the “world’s first advanced touch interface” which has glowing icons on the LCD interface as a menu which also sounds very similar to the Apple iPhone. Aside from the capacitive touch screen, the PRADA phone from LG also plays music, videos which take advantage of the widescreen display, and can view multiple document types, including Powerpoint, Word, Excel, PDF and text files. At only 12 mm thick the fancy mobile gadget also supports EDGE Tri-Band (900/1800/1900) communications, has a 2 megapixel camera, GPRS and Bluetooth.

A USB connection will allow the device to act as a mass storage device although the PRADA phone only has 8MB of internal memory, which really pales in comparison to the iPhone with it’s 8GB of storage. The PRADA phone also has an external microSD slot to expand the memory which will certainly be needed to watch any significant amount of video.

The LG KE850 PRADA phone will also be available in Hong Kong, Taiwan, and Singapore in late March and in Korea the second quarter of 2007, but there are no current plans for a US release.