The World's Most Expensive Iphone

An Apple iPhone 3G made of 18 carat gold and encrusted with diamonds is laying claim to the title of the world's most expensive phone.

Forget the recession - here's the world's most expensive phone. This stunning diamond-encrusted iPhone will set you back a whopping $2,517,345 (£1.6m). The Apple iPhone 3G 'King's Button'.

Designed by Austrian jeweller Peter Aloisson the customised iPhone is priced at £1.6 million.

The handset is surrounded by a white gold line encrusted with a total of 138 brilliant cut diamonds of the best quality.

But the most prominent feature of the "Kings button" phone is its home button that features a rare 6.6 carat diamond.

Mr Aloisson, has a record of blurring the lines between gadget, art and jewellery.

In 1998 the controversial designer released his first diamond-encrusted mobile phone and earlier last year he launched a record-breaking $1.3 million dollar diamond crypto smart phone for Russian encrypting specialist company JSC Ancort.

Besides his "extravagant luxurious mobile phones" which he has been manufacturing for 8 years he also redesigns household objects.

The iPhone has capitalised on the sucess of the iconic iPod to become the most sought after of a new generation of smart phones.

However its competitors, including Microsoft's Zune, Google's G1 and Blackberry's Storm are raidly rolling out a new range of applications in a bid to close the gap.