Abstract: Abstract: Recently, practical and academic scholars have increasingly paid attention to the effect of open innovation paradigm on firms’ innovation capability, especially incremental innovation capability. Based on the perspective of network embeddedness, this study explores the impact of openness on firms’ incremental innovation capability by conducting patent network analysis and hierarchical regression analysis with patent data of main enterprises in the field of smart phone industry during 2000~2014. These results show that, (1) Network embeddedness directly affects firms’ incremental innovation capability, and openness indirectly affects their incremental innovation capability through moderating the relationship between network embeddedness and their incremental innovation capability; (2) At the budding period of technology, openness has a positive moderating effect on relationship between network embeddedness and incremental innovation capability; (3) At the emerging period of technology, the moderating effect of openness disappears; (4) At the stable period of technology, breadth of openness has a positive moderating effect on relationship between network embeddedness and incremental innovation capability.