On my SW version, it seemed that "smart dial" worked with the hardware keyboard only, i.e. in the landscape orientation only. Actually, when I used the hardware keyboard to start typing (which opened the Phone app with the "smart dial" input bar) and then closed the keyboard, which caused the Phone app to switch to portrait, I could continue typing using the virtual keyboard, but it wasn't possible to open the virtual keyboard directly in portrait mode, as there is no text field to tap on, and the virtual keyboard opens only when you tap on an input field...