There's no getting away from comparisons to Apple's upcoming iPhone 3G these days, so here it is: The HTC Touch Diamond was built as a follow-up to the HTC Touch, launched last year as a Windows Mobile-based competitor for the original iPhone.

The Touch Diamond is also a 3G handset, made with a touchscreen, 4G bytes of storage for music and photos and more. It's an elegant follow-up to the HTC Touch and should give the 3G iPhone a run for its money, so long as HTC is able to work with service providers to lower the price of the handsets.

And in Taiwan, HTC has done just that. The company announced Thursday a plan to sell the Touch Diamond for NT$2,999 (US$99) with certain 3G contracts from Chunghwa Telecom, the island's largest mobile phone service provider. That's a dramatic price decrease from the original NT$23,900 (US$786) price HTC talked about earlier.

The price also beats the US$199 price tag on the iPhone 3G with 8G bytes of flash memory storage, which won't be available in Taiwan when it's launched Friday. As long as HTC is able to work out more such deals with mobile phone service providers around the world, it should do well against the new iPhone.

The best part of the Touch Diamond by far is its beautiful craftsmanship, but the touchscreen and functionality come in a close second and third. The handset is sleeker and smaller than the iPhone at 102 millimeters in height by 51mm wide by 11.33 mm thick. The iPhone 3G, which sports a 3.5-inch screen with 480-by-320 pixel resolution, is 115.5mm by 62.1mm by 12.3mm.

The back of the Touch Diamond has diamond contours that drew "oohs" and "aahhs" of praise whenever I showed it to friends. Even for people who don't want to buy one, you should have a look at the design.

One problem with the handset's black exterior, as with many gadgets that have a glossy finish, is that it holds fingerprints. Handle the phone for a few minutes and you have to wipe it off before you show it again. And with a handset built for touch navigation, that's an issue.

The 2.8-inch touchscreen dominates the front of the Touch Diamond and the 640-by-480 pixel display resolution is beautiful. I've never seen nicer screen quality on a phone. You can even see it well in direct sunlight because the screen auto-adjusts for different lighting conditions.

The IDG News Service is a Network World affiliate.