The term 'Smart' is used for a material or devise with unusual properties or functions. Thus degradable plastic is a smart material. What is sold as a 'smart phone' is a phone with many other functions normally found in a minicomputer or tablet including browsing facility. Today icon smart phone is advertized for less than Rs. 3000 (cheaper than an ordinary cell phone, three yrs back)

A smart phone is usually a PDA phone that has many functions such as a Blackberry, Iphone, Instinct and others. Some have windows mobile and others have there own proprietary OS. Regular phones do internet and stuff but smart phones do it better and you can add applications to smart phones where it is harder to do to a regular phone.