There was an anniversary at the end of 2008 you might have missed – 5 December marked 50 years since a young Queen Elizabeth II, who was in Bristol, made a direct telephone call to the Lord Provost of Edinburgh, 300 miles away. Before that day, to make a long-distance call required the services of a pencil-wielding operator. Fifty years later, and after countless more footnotes in the history of communications, 2008 will also be remembered as a landmark year. It will be known as the "year of the smart phone".

Back in 1958, all phones were smart but today to qualify a blower must do a lot more than secure a direct line to Scotland. Smartphones will, among other things, tell your Facebook friends that you're hangover is a bad as predicted, transmogrify into a wind instrument known as an ocarina, and recognise the Abba track you heard on Mamma Mia!, download it from the internet and play it. And that's on top of the functions we've come to expect from our mobiles – things like texting, telling us the time and, say, phoning people.

"Things really have moved forward in the past 12 months," says Rhiain Morgan at T3 magazine. "Where once you used to have MP3 players, phones, cameras, and a device for emailing, 2008 was the year they became one." It was also the year we learnt to touch. Salivating among "iFans" peaked at the end of 2007 as Apple unveiled its mighty iPhone. With its sleek lines and giant gleaming screen, it became the must-have gadget of 2008.

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The first phone to dispense almost entirely with buttons; it relied instead on users to stroke its multi-touch screen (something they were bursting to do). Demand for the iPhone only increased with the release of the improved 3G version in July (worldwide, Apple sold a million of the things in the first three days). Meanwhile, rivals raced to satisfy demand for touch screens.

But why did this Apple-inspired seduction by touch come only in 2008? As Adam Leach, a mobile phones expert at the analysts, Ovum, says, "the technology is actually quite old. PDAs have had touch screens for more than 10 years, but when they became smartphones they lost that capability. Manufacturers such as Nokia were concentrating on one-handed use and the keypad being the best way to control small screens. Then when Apple looked at larger screens, they thought rather than adding touch they would create a whole experience around it."

A measure of the way touch has taken off is that Research in Motion, the Canadian makers of the BlackBerry, ditched the Qwerty keypad that has become its trademark in favour of the world's first pressable touch screen (the whole screen clicks when pushed to reassure those for those who would miss the mechanical certainty of buttons).

But while the BlackBerry Storm has received generally good reviews since its November release, the race has left some straggling. "I think manufacturers have looked at the iPhone with short-sightedness," says Carolina Milanesi, who heads up mobiles research at the analysts Gartner. "They thought that if they have touch, consumers will be as excited about it as they were about the iPhone. But that's not it – what makes the iPhone successful is its usability and 2009 is going to be about rivals improving that."

After touch, the second key development in the smartphone showdown has been the birth of Google's Android operating system, as seen on the lauded G1. The phone lacks the good looks of the iPhone or the Storm but sets the standard as the first open source phone – anyone can design applications and make them available at the Android Marketplace. Unlike Apple's App Store, where iPhoners in their droves can get hold of the ocarina and Facebook applications (Apple says more than 300 million applications had been downloaded by November) Google has no control over content – the smartphone has become fully customisable and the App phenomenon is set to gather pace in 2009.

There is, however, what Adam Leach calls an "economic black cloud" hanging over the industry. Several analysts say handset sales are shrinking for the first time in eight years as fewer of us fork out up front for expensive contracts to use fancy phones. Despite this, Milanesi predicts the number of us upgrading to smartphones will increase overall – only about 10 per cent of phones currently fit the bill – we'll just keep them longer and operators will have to offer more tempting deals. Crucially, Milanesi says "the phones will also have to be better".

One firm hoping its phone will be best in 2009 is Nokia, a name that has been absent from the trinity of super smartphones that have shaken up the industry (the iPhone, the Storm, and the G1). "We're very excited about the Nokia N97," says Morgan at T3 of the phone, which is set for release later this year. Its features will include a whopping 32GB of built-in storage and "social location", which will use GPS and a compass automatically to inform friends of your whereabouts (thus, Nokia hopes, appealing to the Facebook generation).

A relative sleeping giant in the smartphone stakes, the Finnish phone maker can be expected to wake up with a start when the N97 goes on sale. "The iPhone will still be the phone to beat in 2009," Milanesi says, "but Nokia, with its overall 38 per cent market share, remains the manufacturer to beat. If they get the right device, it could be game over."

Battery Blues

A phone is not mobile when it's plugged into the mains by your microwave. And, as smartphones come bursting with ever more energy-hungry features, that's where they're spending most of their time. Gone are the days of weekly charging – the worst smartphone performers give up the ghost in just a few hours. "Battery life is one of the big inhibitors in the market," says Adam Leach, an analyst at Ovum. "We're seeing huge increases in processor speed, memory and disc drive size, but only incremental improvements in battery technology."

Manufacturers are already experimenting with less power-hungry screens and more efficient hardware, but most predict battery life will get worse before it improves. One glimmer of hope on the horizon is what's known as "WiTricity", or wireless charging. When it takes off (don't hold your breath) it will mean your phone charges as soon as its range of a power hotspot, even if it's still in your handbag, sitting on your desk, or by that microwave.

Big-screen blockbusters: The best smartphones

Samsung Omnia

Launch: June 2008.

Good for: Photographers, Windows loyalists.

What's great: Sexy looks, great camera, Windows for those who can't do without it.

What's not: Battery life, sluggish touch screen, unreliable 3G connectivity.

BlackBerry Storm

Launch: November 2008.

Good for: "Crackberry" addicts, non-business converts, emailers.

What's great: "Clicky" SurePress touch screen, looks to rival the iPhone, BlackBerry email.

What's not: No Wi-Fi, fiddly "keys", Vodafone only.

Nokia N97

Launch: This year (no date announced).

Good for: Everyone, hopefully.

What's great: Huge memory, Nokia usability, "social location" feature.

What's not: A bit chubby. Otherwise, too early to say.

LG Renoir

Launch: September 2008.

Good for: Phone snappers.

What's great: Screen quality, camera, sound.

What's not: Sub-standard touch screen, fiddly menus.

Google Android G1

Launch: October 2008.

Good for: Early adopters, master Googlers, net workers.

What's great: Unlimited apps at Android Marketplace, Google's web expertise, proper keyboard.

What's not: Clunky looks, no video camera, short battery life.

Apple iPhone 3G

Launch: July 2008.

Good for: Post-BlackBerry business types, kids, Apple posers.

What's great: Stunning looks, revolutionary touch screen, cool apps.

What's not: Reported screen freezes, stingy battery life, only on O2.