IntroductionOur client, XYZ, has designed a radically innovative smartphone, but its current business model is not suited to its commercialization. The Business Model (BM) of a company is the articulation of the processes through which resources are exploited to create and deliver value to stakeholders enabling the company to generate a profit (Chesbrough, i2010). XYZ must therefore undergo a fundamental overhaul of its BM to successfully bring its new smartphone to market. The smartphone industry is characterized by high competition especially between manufacturers with Samsung (30%) and Apple (13%) dominating the market (Gartner). It has recently experienced a disruptive change with the success of Google's open source operating software (OS), Android, which many manufacturers now use in place of their own proprietary operating system. Therefore XYZ must not only compete with the giants of the manufacturing sector, but also find innovative solutions to develop software capable of competing with Android and iOS. The theory of Open Innovation (OI), introduced by Henry Chesbrough (2003), has gained significant attention from companies seeking to use external resource agents to increase the efficiency of their R&D activity. This report will illustrate how XYZ can use OI tools to design an innovative BM that allows it to bring a product ecosystem centered around its phone to market. A first part will outline the implications of BM Innovation. It will argue that XYZ must promote coupled processes with partners and leverage Outside-in dynamics to increase its market potential. Secondly, it will focus on the app creation process by showing that XYZ must release parts of its intellectual property (IP) via licensing or Open Source depending on the need for a proprietary operating system related to capturing value if it wishes to develop. .. . half of the paper ......m House.Johnson, MW, Christensen, CM, Kagermann, H., 2008. Reinventing the business model.Lakhani, K., Boudreau, K., 2009. How to manage innovation external. 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, service-oriented enterprise. Bus. System Inf. The Eng. 1, 37–45. Shoemaker, P.J., Vos, T., 2009. Gatekeeping theory. Routledge.Simcoe, T., 2007. Intellectual Property and Compatibility Standards: A Primer. First Monday 12.Stringer, R., 2000. How to manage radical innovation. California Manage. Rev. 42, 70–88.Teece, D.J., 2010. Business models, corporate strategy and innovation. Long-Term Planning, Business Models 43, 172–194. doi:10.1016/j.lrp.2009.07.003Willis, N., 2008. The iPhone SDK and Free Software: They Don't Match.