Updated: read our full reviews of the HTC Touch Diamond and the sequel, the HTC Touch Diamond 2.

When it comes to beautifully designed, do-everything touchscreen smartphones, the iPhone understandably takes the lion's share of the attention.

But while other devices have exceeded the iPhone's spec, few have come close to its styling or usability until the HTC Touch Diamond.

Minimalist mobile

It's surprising at first, especially if you're familiar with previous Touches, because it's really very small, much more like a standard mobile than a state-of-the-art smartphone.

It's all in minimalist shiny black, the front dominated by the touchscreen, though the rear seems to break the minimalist mould with a series of triangular undulations similar to Nokia's Prism handset.

Beneath the 2.8in, VGA (480x640 pixels), 65,000-colour screen (a big improvement on HTC's previous screens) are call start and stop, home and back buttons surrounding a circular pressure pad.

It's very small, and you need to be a bit careful about pushing it at each of the four edges, but it works. The side keys are volume up and down and on/off/standby on top.

The stylus slides into the side and is pulled into place by a magnet, which is a nice touch, if you'll pardon the pun. It's useful as a back-up but in truth we rarely had to use it, since the vast majority of the Diamond's functions are easily accessible by thumb.

Upgraded interface

Though the screen is smaller than its predecessors', it's sharp and clear, and HTC takes care to keep the Windows Mobile 6 OS doing what it does best - working in the background, and not flaunting its quirks to the user.

HTC's attractive TouchFLO interface has now been upgraded to TouchFLO 3D. It still lets you slide your thumb up, down or across to bring up different menus, but it looks better with the new 3D effect and a scrolling menu at the bottom of the screen, giving you quick access to contacts, messages, favourite programmes, internet, music player, photos/videos, settings, and that HTC favourite, the weather.

In addition to the menus, most of the main functions have their own graphics that have been entertainingly HTC'ed.

In messages, the first few lines of your outstanding missives peek out over the top of an envelope, in contacts your favourites can be added to a Rolodex, and the music player has its own version of that rather lovely cover display from the iPhone.

This is just the sort of thing that more manufacturers should be doing to personalise the functional but dull Windows OS.

Speedy connectivity

Browsing is finally becoming fun. An accelerometer automatically flips the screen from portrait to landscape and the touch pad acts like a scroll wheel allowing you to zoom in or out of pages in the Opera 9.5 browser.

Brushing your thumb or the stylus across the page allows you to navigate around the page with ease. Finally, this is starting to look like the TouchFLO we were promised when the first Touch launched last year.

It has 7.2Mbps HSDPA if your network offers it, and if that's not fast enough, there's also Wi-Fi.

There's also a YouTube-specific feature that optimises video for the Diamond's screen. It works very well too, allowing you to blow up the videos to full screen size.

Improved camera

The 3.2 megapixel camera is a definite improvement on past efforts from HTC, but it's still something of an afterthought.

There's no flash of any kind and there's at least a four-second delay between pressing the button and the shutter operating, so quick snaps are not its forte. There's not much in the way of editing facilities either, or a multi-shot option.

It does take decent enough pictures in good light however, and its slideshow is still a thing of beauty, fading from one pic to the next, and allowing you to zoom in or out by twirling your finger on the screen.

Video however has an alarming amount of movement smear, though it's still better than previous HTC cameras.

Built-in GPS

The Diamond also has GPS onboard and uses Google Maps to show your location in graphics and pictures.

The small screen means it's not the most useful tool for navigating while driving, but for finding your way on foot, it's perfectly fine.

Unfortunately, adding another sat-nav system such as TomTom (like you get on the Cruise) is made slightly more difficult by the lack of memory card slot (you'd need to download it from your PC) and it would take up a sizeable chunk of your 4GB onboard memory.

Limited battery life

For music, HTC's own player is more attractive than Windows Media Player, plus there's a graphic equaliser and also FM radio too. Sadly, HTC is sticking with its USB plug for the so-so headphones, so you won't be able to upgrade to a better pair without an adaptor, unless you use Bluetooth.

Compromises have been made to pack all of HTC's expertise into such a small package. It doesn't even pretend to have much in the way of battery life, promising just four hours of talktime. And sure enough, we found we got significantly short of two days' moderate use out of it.

It's also reverted to tri-band rather than quad-band like its predecessor the Cruise and possibly the most significant no-no is the lack of memory cards – 4GB isn't bad, but it will only take you so far. Oh, it also tends to run worryingly hot after a while.

A rival for the iPhone?

The iPhone may have the visual edge with its big screen. But if you want a smartphone that's eminently more pocketable, and can do everything that the iPhone can do and more, the Touch Diamond is the one to go for.

Looks: 8
Ease of use: 9
Features: 9
Call quality: 8
Value: 9

Network availability: Orange (others TBC)

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Update: since reviewing this phone, the successor, the HTC Touch Diamond2 has been releases. Read our review of the HTC Touch Diamond2.