IntroductionOur client, XYZ, has designed a radically innovative smartphone, but its current business model is poorly suited to its commercialization. A company's business model (BM) is the articulation of the processes by which resources are leveraged to create and deliver value to stakeholders, enabling the company to generate a profit (Chesbrough, i2010). XYZ must therefore carry out a fundamental overhaul of its BM to successfully market its new smartphone. The smartphone industry is characterized by strong competition, particularly between manufacturers, with Samsung (30%) and Apple (13%) dominating the market (Gartner). It has recently seen a sea change with the success of Google's open source operating software (OS), Android, which many manufacturers now use rather than their own proprietary operating system. So, XYZ must not only compete with the titans of the manufacturing industry but also find innovative solutions to develop software that can compete with Android and iOS. The theory of open innovation (OI), introduced by Henry Chesbrough (2003), has attracted the attention of companies seeking to use external tools. agents to increase the efficiency of their R&D. This report will explain how XYZ can use OI tools to design an innovative BM allowing it to bring to market an ecosystem of products around its phone. A first part will present the implications of BM Innovation. It will argue that XYZ needs to promote coupled processes with partners and leverage outside-in dynamics to increase its market potential. Secondly, it will focus on the process of creating applications showing that XYZ must disclose some of its intellectual property (IP) either through licensing or through Open Source depending on the need for a proprietary operating system by in relation to value capture if it wishes to develop..... . middle of paper ......m House.Johnson, MW, Christensen, CM, Kagermann, H., 2008. Reinventing your business model. Lakhani, K., Boudreau, K., 2009. How to manage external innovation. Director of MIT Sloan. Rev.Satzger, G., Jetter, M., 2010. Technological innovation and its impact on business model, organization and corporate culture – IBM's transformation into a globally integrated and service-oriented company. Bus. Inf. System. Eng. 1, 37–45.Shoemaker, PJ, Vos, T., 2009. Access control theory. Routledge. Simcoe, T., 2007. Intellectual property and compatibility standards: introduction. First Monday 12.Stringer, R., 2000. How to Manage Radical Innovation. California Manage. Rev. 42, 70–88.Teece, DJ, 2010. Business models, business strategy and innovation. Long-Range Planning, Business Models 43, 172-194. doi:10.1016/j.lrp.2009.07.003Willis, N., 2008. The iPhone SDK and Free Software: No Match.