When my wife first enrolled at Georgia Tech for her Master's in Industrial Design, her heart was set on designing consumer products, more specifically toys and products for children.
Half way through her second year of the three year program, she started to tell me about information design, human computer interaction, user behavior research, and other completely foreign concepts. In 2008, user experience design, or UX, was not common terminology (at least in Atlanta). She wanted to expand her concentration to include software applications as well.
I struggled to understand exactly what she meant. Since I majored in CS, I naturally thought that she simply meant GUI design. Why would she invest 3 years in a program to design GUIs? It didn't add up to me.
Overtime, with her teachings and the real world example of the iPhone and the many apps that have since been created for it, I grew to know and understand that UX is not UI. It's much more than that and not mutually exclusive from software, hardware, psychology, feeling, or emotion. It's a collection of the overall experience that someone has when they use your product or service.
UX is the intangible design of a strategy that brings us to a solution.
Today, "User Experience" is an often overused phrase to collectively describe a disjoint number of functions and skills that are required to design products or applications. Some companies and industries do a very good job at integrating these functions into core groups within their organizations with key positions of influence and authority.
Sadly, most do not. More often than not, UX is left up to a single person or group of people that have been given simple tasks of improving workflows or making something look prettier. I strongly believe that companies that truly understand and focus on improving the core user experience in every aspect of their business are the ones that will foster deep, lasting loyalty and relationships with users and ultimately win in the long run.