Existing research on digital product innovation mainly focuses on digital-native product innovation. However, the vigorous development of various digital technologies has provided conditions and possibilities for traditional manufacturing enterprises to innovate and design traditional physical products into digital products. Based on the exploratory single case study of Haier Smart Home, the research deeply analyzes the realization mechanism of innovatively designing traditional physical products into digital products. The research found that: ①The innovative design of traditional physical products goes through three stages for digital products: "judging emerging digital product design trends - creating digital products - shaping the market''s understanding of digital products". By promoting the connection between digital and real, enterprises play the role of digital empowerment and support the digital reconstruction of traditional physical products. ②The essence of the innovative design of traditional physical products as digital products is the digital reconstruction of the product framework, which is reflected in the process of "frame emerging-frame integration-frame giving". ③ In the process of innovative design of traditional physical products, digital technology plays the roles of environment, component and symbol respectively to support re-examination, redesign and redefinition. The research contributes to theoretical issues in the field of emerging digital product innovation, and provides practical inspiration for guiding traditional entity enterprises to build digital product advantages.