Smartphones have recently come under the spotlight as alternatives to feature phones in the cellular phone market. With the importance of this market change, however, most previous studies on smartphones have been conducted on the assumption that the smartphone is used as a specialised tool for a particular purpose, such as smartphones for logistics or smartphones for medical services. Since more and more consumers are adopting smartphones as tools for general use in their everyday lives, it is worth focusing on general consumers. Also existing diffusion model has limitation that it doesn't consider mutual relation about multiple services or products. Therefore, this study proposes displace diffusion model for forecasting demand of smartphones, and investigates factors affecting the adoption of smartphones in the cellular phone market, particularly focusing on the differences of smartphone users and feature phone users. For the purpose of analysis, Markov Chain, Technology Acceptance Model and Decision Tree were used as main research methods, and surveys were used to reflect customer opinion. Research findings are expected to help understand the diffusion process of smartphones and to help further develop an effective marketing and R&D strategy in the cellular phone market.