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2 Solution AiMi, A Cradle for Digital digitization spells the end for vinyl LPs and cassette tapes, and for all practical purposes, forces them off the music stage. CDs and MDs have allowed us to spend many enjoyable and pleasant hours listening to our favorite types of music. But now, these too are gradually being superceded by MP3 players and music downloading via mobile phones. Thus, there is no longer any need to carry around a bulky cassette Walkman player, and many people are already in the process of discarding their CDs. The ipod, MP3 players, and music via mobile phones are now becoming most peoples first choice when it comes to listening to music. Certainly, the above changes in the way that music is now being packaged, allows us to have more convenient, faster and complete music experiences. Industrial Transformation AiMi A Cradle for Digital By Li Sheng Due to the tremendous impact from such outside forces as piracy, market saturation and Internet MP3 downloads, global record sales shrank 22%, from 1999 to 2003, which has drained record company revenues to the tune of USD 6 billion. Needless to say, the entire recording industry is still reeling from this impact and prospects for the future look quite gloomy and pessimistic to many insiders, so much so, that now many music practitioners have started to consider turning to other trades. So, people are wondering who or what will come to rescue of the floundering record industry? Who or what will help light the path that lies ahead? Starting from 2002, RBT was included among several value-added services provided by communication networks and online music sales have grown in proportion to more traditional music sales. The rapid growth in sales of digital music has helped to fill the gap generated by the downturn in traditional music, thus, leading to a recovery of the music market, with sales continuing to grow at a steady rate. 31
3 In 2002, RBT was launched in Korea for the first time, which proved to be a stunning success in the Asia Pacific, and from there it quickly spread to other parts of the globe. Within 3 years, China Mobile had acquired 120 million RBT users, with a penetration rate of over 45% and an annual revenue that exceeded RMB 6 billion. According to a research report on the mobile music market released by Juniper Research, which is a market research agency, the revenue from mobile music is expected to reach USD 9.3 billion in 2009, with the widespread distribution and proliferation of full-song downloads and RBTs. However, behind this enjoyable music banquet facade is a grotesquely huge battlefield in which many players are fiercely contending for dominance. A new contest for greater profits has just begun to open up in the digital music field. Currently, Apple has the upper hand, while four other major recording companies seem quite reluctant to share their profits with other potential players. In addition, Internet companies which enjoy great popularity such as, MSN, Napster, Myspace and Yahoo, and even more traditional distributors like Walmart, have all decided to take the plunge into the digital music market. The alluring potential and profits to be had in digital music is attracting more and more players into this very lucrative market. Huawei s Route to Digital On May 17, 2003, which is celebrated as the World Telecommunication Day, China Mobile successfully launched its first RBT system in Shanghai, which was undertaken by Huawei, marking its starting point and path into digital music field. From this point onward, Huawei has become an invaluable strategic wireless music partner of China Mobile, providing music service that accounts for 80% of the market for China Mobile. In October 2005, Huawei again assisted China Mobile in launching its central music platform. Huawei s AiMi integrated digital music solution was put into full commercial use. In June 2006, a research report from IDC revealed that Huawei ranked No.1 in terms of the number of its wireless RBT users in the world, which proved that AiMi digital music capabilities are unparalleled. In December 2006, AiMi digital music solution had been applied by over 70 operators in more than 50 countries, serving 160 million users. In January 2007, Huawei joined hands with The Orchard with its AiMi solution to create a music cooperation alliance. The above achievements are a series of milestones that Huawei has reached on its path of digital music development, which is a further indication of Huawei s leading role as a pioneer and explorer of global digital music service. In fact, Huawei has been working hand-in-hand with operators and growing in terms of experience ever since it stepped into the digital music field. AiMi Layered Service Assists Operators Based on years of experience and understanding in the digital music market, Huawei continually strives to improve its digital music solutions. It provides an AiMi E2E digital music solution that combines the platform, business, service and operation, that is specifically tailored to meet operators needs in terms of software, business and service models, which ensures that operators will be able to bring their operation advantages into full play and attain a leading place in the digital music market, while at the same time, allowing end users to enjoy personalized music service anytime and anywhere. Management platform layer This layer provides unified management of users, contents, subscription relations, charging, terminal adaptation and marketing activities relating with convergent music service. With enhanced capabilities to conduct content-centered cross marketing among different services, this layer effectively enhances existing network services. It also helps to drive the development of future convergent music services, ensuring operators can leverage the existing market foundation to quickly tap into the digital music market, so that they are able to provide a more comprehensive service experience for their users. Thus, the chimney-type development from scratch can be avoided. Capability platform layer Through independent R&D and cooperation with world class professional platform developers, Huawei is able to provide the proper components needed for music services, which include such features as, converged downloading, DRM, online listening to streaming media, RBT of telecom network, and terminal-related RT capability. Through componentization of the capability platform, the appropriate system architecture is formed for sustainable development. Meanwhile, the openness of the system architecture allows the platform to easily be integrated with the existing capability platform of operators, to reduce the CAPEX and form balanced service evolution. Business layer A i M i f e a t u r e s a u n i f i e d o p e n architecture, which focuses on ease of use and innovation of services. The platform design is based on the concept of a shelf, which means services can be flexibly loaded and unloaded to meet the specific needs of operators in terms of music services. Through localized development and cooperation with operators, Huawei can quickly deliver personalized music services through customized development, which is specifically tailored to meet the needs of operators and satisfy the needs of localized music services. Huawei, relying upon its rich global experience in music service innovation, is able to deliver abundant services for the music platform, to assist operators in attracting more end users, while at the same time, tightening relations between operators and the entire music ecological environment by way of constant service innovation. Service layer 32
4 Solution AiMi, A Cradle for Digital RBT Full-track Ringtone Club Clip Wallpaper Blog Wireless Debut Sharing Network Top-Selling Concert New Release Fig.1 Layered AiMi is convenient for operators to implement services AiMi digital music solution had been applied by over 70 operators in more than 50 countries, serving 160 million users. Digital music service in the future will predominantly tend to be localized and more personalized. With its rich practical experience in providing digital music service around the world by way of digital music projects, Huawei is able to assist operators in building an ecological environment that is suited for the localized digital music industry through cooperation with global and local partners, based on the experience of its digital music service team and actual conditions of localization. T h r o u g h p r o f e s s i o n a l s e r v i c e c o n s u l t a n c y t e a m s a n d i t s g l o b a l content partners, Huawei is able of providing services for digital music, which include such services as, service consultancy, operation consultancy, custom development service, equipment maintenance, content processing, report analysis and various types of training, from planning, to maintenance related professional services. Operation layer Huawei is able to provide digital music operation, hosting integrated with localized marketing, according to the needs of operators and depending on the music operation partners and service resources across the globe. Thus, allowing it to provide full process service for operators, from marketing planning, cooperation, to plan execution, setup of marketing channels, result analysis and service adjustment proposals. With the operation hosting plan provided by Huawei and its partners, services can be deployed faster by using Huawei s mature service operation environment and its established ecological environment for digital music. AiMi digital music alliance Huawei not only provides operators with complete digital music solutions, but also helps them build a full value chain of digital music. By strictly adhering to a mutually beneficial principle and maintaining an open and cooperative mind, Huawei is committed to the task of building a digital music alliance. This alliance includes: operators, music record distributors, SPs, DRM technology providers, platform providers, and terminal vendors. Huawei welcomes aspiring entities who are devoted to the R&D of digital music into its AiMi alliance. It believes that through joint development of the digital music market, it will be better able to provide customers the best content, plans and services. AiMi: A Perfect Option for Digital A practical development strategy for operators 33
5 Management platform Capability platform Businesses Services Operation user management content management subscription management Terminal adaptation management Marketing management Settlement management RBT RT DLS Streaming DRM function download search magazine on Demand forum Consultation Maintenance Training Customized development Non routine report development Content processing Operation entrustment Operation scheme design Operation strategy execution Operation analysis Technical solution Operation and maintenance AiMi digital music alliance Fig.2 AiMi E2E solution covering platform, business, service and operation Operators that have not deployed 3G networks may tap into the digital music market by rolling out services combining music and telecom services such as, RBT or RT. The RBT in particular, which features a short value chain, independent of terminals, free from digital rights risks and capable of self dissemination, is very conducive to service and user development. This in turn allows for a smoother evolution to an ultimate convergent digital music service, which relies upon the user base of RBT or RT service and established music marketing channels. In the areas covered by 3G networks and with a minimum amount of piracy, operators will be able to provide a full-song downloading service for users, which will help to foster the habit of purchasing and experiencing mobile music. Huawei s expandable strategy, which is based on telecom music service, allows operators to not only increase their ARPU, but also aids in laying a more solid market foundation for future digital music. This also allows operators to gain a competitive advantage when facing future competition created by IT/telecom service convergence. Sharing rich experiences in global digital music service Hu a w e i s d i g i t a l m u s i c s e r v i c e consultancy team consists of several renowned mobile music service providers, along with its technical staff. The team has gained a lot of practical experience in operating music service from being involved in over 70 digital music projects worldwide. With a firm grasp and understanding of the characteristics and needs of different regions for music services, Huawei s team knows how to provide a complete music experience through services to assist operators in service operation. An open platform for service personalization and localization Huawei s digital music platform provides user management, administrator management, content management, user subscription, user music management, music distribution, system management and terminal development interface. With this type of platform, operators are better equipped to conduct localized c u s t o m d e v e l o p m e n t o f s e r v i c e s. Moreover, Huawei is constantly rolling out new services to support operators through extensive service integration and cooperation. Exerting direct channels advantages in new economy model The flat channel is a feature of digital music development. The best personalized music service experience can only be provided to users after an in-depth understanding of users preferences. Through customer care via active marketing, Huawei s digital music solution provides users with their favorite music information, services and contents. AiMi alliance: creating an ecological environment to keep music active From the management platform layer to the operation layer, with partners from CPs, digital content integrators, SPs, software platform vendors, service development integrators, to terminal vendors, Huawei is currently in the process of improving its AiMi digital music alliance. Thus far Huawei has hammered out close partnerships with more than 50 professional mobile and Internet music service providers. Huawei provides them with both hosting and managed service for their unique music services, which are delivered to end users via Huawei s digital music service shelf platform, under the brand names of operators. Digital music is an ongoing field that is continually experiencing innovation. Thus, Huawei is committed to working with its partners to continually provide competitive digital music service. Editor: Xu Ping x.ping@huawei.com 34
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