Huawei AIMI Digital Music Solution

HUAWEI TECHNOLOGIES CO., LTD.

According to the statistics from the IFPI (International

Federation of the Phonographic Industry), the

sales volume of the global phonographic industry

dropped by about 22% (USD over 6 billion) in the

past five years till 2003 and the sales volume of

disc records declined sharply all over the world.

Starting from 2004, the sales volume of digital

music has been rapidly growing to make up for

the decrease of the traditional sales of music. The

turnover of the music market started to grow for

three consecutive years and the growth tendency

will keep going on. The increase of broadband

subscribers, the popularization of wireless devices

and the construction of the next generation

network of a higher rate will further promote the

sales of digital music. It is estimated that, pushed

by digital music, the music market will grow at an

annual rate of approximately 5.2% starting from

2006 and the turnover will reach USD 48 billion by

2010 with digital music taking up a proportion of

40% to 60%.

Market Prospect of the Digital Music

The digital music value chain is long. It is difficult to construct a

complete industrial chain in a short term. Users have requirements

for software, service and business model different from those for

common software products. To satisfy such requirements, Huawei

has provided the overall E2E solution of platform + service +

business + operation.

Huawei Digital Music Solution1

Service hierarchy of Huawei digital music service solution

ManagementPlatform

Music user management

Music content management

Music subscription management

Terminal adaptation management

Campaign management

Settlement management

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RBT

RT

DLS

Streaming

DRM

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Technical solution O&M

AIMI Digital Music Alliance

CapabilityPlatform

Business Service Operation

Music function download

Music search

Music magazine

Music on demand

Music BBS

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Consultation

Maintenance

Training

Customized R&D

R&D of non-routine reports

Content processing

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Managed Services

Operation plan design

Operation strategy execution

Operation analysis

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Huawei digital music solution provides powerful uniform

management capabilities to centrally manage the users,

contents, subscription relations, charging, terminal adaptation

and marketing & sales activities of the integrated music service.

The major component CMS, DLS and RBT have been put into

commercial application on a large scale around the world. As to

service operation, Huawei provides abundant service capabilities,

hierarchically fulfills the service requirements, and implements

a service network and localized development. As to services,

Huawei closely cooperates with carriers to provide end-to-end

services relying on its world-leading music downloading (RBT/ring

tone/full-track downloading) platform and operation assistance

experience. As to operation, Huawei provides a full range of

routine operation activities such as operation consultation,

sales and marketing planning, channel establishment, sales and

marketing execution and result analysis through its partners.

Huawei digital music solution has the following advantages:

The integrated expandable platform supports carriers' long-

term development of music services. Huawei solution is

backed up by a full line of end-to-end products and services.

Huawei has abundant practice and project implementation

experience in digital music, and its network service capacity

has exceeded 180 million users. It can ensure the fast

implementation of projects. In addition, the solution was

successfully commercialized.

Huawei assists carriers to innovate and develop their music

services and ensures successful service deployment relying on

its global service innovation and sales experience.

Huawei ensures the provision of services and contents

through a complete industrial chain. Experienced in

cooperating with others at various

links of the industrial chain,

Huawei has constructed a

digital music alliance.

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Suggestions on Digital Music Development

How to successfully seize the market?

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Digital music has a potentially huge market. Its market

exploration will be a long-term process.

The digital music service development should center

on comprehensive user experience to provide abundant

services, so as to satisfy users’ demand for living, recreation,

vogue and personality.

The digital music service operation should start from

profitable services such as RBT so as to attract digital

music consumers and cultivate users’ consumption habits.

New services can be developed on this basis.

The digital music market must have a perfect ecological

environment that guarantees its development. We shall

well construct all links in the industrial chain to ensure the

capability of quick service deployment.

For the development of digital music, the service

shall be driven by precise marketing to raise the service

volume and ensure the maximum value of the service.

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It takes quite a long time to develop services like full-track

downloading in some areas due to factors such as piracy and

network limitation. However, some other services such as RBT

and RT can help carriers quickly enter the digital

music field and gain profits.

Provide the RBT service in places

with limited network capabilities:

Promote services, attract users and

ultimately provide comprehensive

music services through the self-

spreading feature of the RBT service.

Focus on the full-track downloading

service while providing services such as RBT

and ring tone downloading on the basis of right protection.

Huawei suggests that carriers adopt the following strategy to

develop digital music according to the market conditions: Enter

the market from a single point, gradually develop abundant

services, and construct a music network in the end to satisfy

users’ requirements for enjoying music and life.

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How to quickly gain profits?

HUAWEI TECHNOLOGIES CO., LTD.

Add: Bantian, Longgang District Shenzhen 518129 P.R.China

Tel: +86-755-28780808Version No.: M3-050030-20061106-C-2.0

www.huawei.com