In vertical annular flow, the motion of droplets in the gas core is dominated either by a diffusion mechanism, when the droplet size is small, or by inertial effects when droplets are large. These two mechanisms have to be considered when predicting deposition rates. Furthermore, since droplet-droplet interactions influence droplet motion, a deposition model should also account for collisions and coalescence among droplets. After reviewing the available deposition models, the effect of coalescence on droplet motion is theoretically analyzed. The results demonstrate that coalescence extends droplets residence time in the gas core thus decreasing the deposition coefficient. On the basis of these results, a new deposition model which accounts for the two deposition mechanisms and includes the effect of coalescence is proposed and compared against existing experimental data.