In Phong shading (1975 - Phong Biu-Tuong)(not to be confused 
  with Phong's illumination model), the surface normal is linearly interpolated 
  across polygonal facets, and the Illumination model is applied at every point. 
  
  A Phong shader assumes the same input as a Gouraud shader, which means that 
  it expects a normal for every vertex. The illumination model is applied at every 
  point on the surface being rendered, where the normal at each point is the result 
  of linearly interpolating the vertex normals defined at each vertex of the triangle. 
  
  Phong shading will usually result in a very smooth appearance, however, evidence 
  of the polygonal model can usually be seen along silhouettes. 

 In 
  the Phong method, vector interpolation replaces intensity interpolation.
In 
  the Phong method, vector interpolation replaces intensity interpolation. 
  Graphic courtesy of Watt.