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I'm redesigning iTunes and in this program "create playlist" action is hidden. You have to right click on "Music Playlists" to get a dialog of available options like "New playlist", "New Smart Playlist", "New Playlist Folder". Hiding an essential user action is a bad UX so I decided to make visible button for that. Creating one button would make interface less cluttered but there will be more clicks to finish the action.

Which solution would have better usability?

Also "New Smart Playlist" has an additional dialog with options to create it and in original iTunes UI it has three dots indicating pop up dialog like "New Smart Playlist..."

Can I design a button without those three dots or would it make UX worse?

Here is my first option:

First

Here is my second option:

Second

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Concerning your question on "..." there is a topic on it already: Usage of ellipses "..." on buttons There it is said to use ellipsis when after pressing the button an additional input (e.g. opens a dialog) is required to proceed.

In my opinion splitting the functionality of the button is of added value if some of the new actions can go without a dialog, e.g. one simply presses on "Smart playlist" and that's all - the created playlist (even empty, but preferably with at least one item) can be edited later.

For creating a folder, why not place a textbox where user enters the folder name before clicking on "Create folder" button?

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  • I don't want to place a textbox because the solution iTunes has right now is better: it already displays a folder where it's created and has "untitled folder" title selected to edit it or just press enter and create a folder with that name. Thus, user knows if he makes folder name too long, because folder is located inside sidebar. Secondly, user sees where folder was created.
    – Peter
    Apr 10, 2017 at 16:40

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