This research focuses on analyzing the specialization models of service industry. Particularly, a correlation between innovation types and specialization strategies will be constructed for the analysis of industrial specialization enabled by the IIS (innovation intensive service) platform model. A case study of Taiwan's Telematics service industry is also used in this research to demonstrate the validity of this specialization model. The IIS platform framework depicts the inter-linkages among six innovation types and eight specialization strategies in accordance with the requirements of value activities and externalities. This model connects firm's core competence, value activities, externalities, and specialization strategy, allowing analysis of needed integration of value activities and externalities based on pre-determined specialization strategy. Results of the empirical study reveal that the optimal specialization strategies of Taiwan's Telematics service industry is the marketing brand & channels specialization based on market innovation, and the network & platform operations specialization based on structural innovation.