Apple’s Jobs Unveils ICloud, New Mac Software

Apple Inc. (AAPL) Chief Executive Officer Steve Jobs, aiming to capitalize on a shift away from personal computers, introduced a service that stores music and other files online and keeps devices synchronized wirelessly.

The product, called iCloud, will let users move their “digital life” from PC hard drives to remote data centers in the “cloud,” Jobs said today at Apple’s developers’ conference in San Francisco. As part of the service, Apple iTunes, the biggest music seller, will let users keep their existing music library in the cloud for $24.99 a year.

“If I acquire a song and buy it right on my iPhone, I want to get it on all my other devices,” Jobs, 56, said when he introduced the service. “Keeping these devices in sync is driving us crazy.”

Apple is using iCloud to retain its dominance in the smartphone and tablet markets amid fresh competition from devices powered by Google Inc. (GOOG)’s Android software. The service helps improve how users can access content across different Apple devices, keeping customers from defecting to rivals, said Frank Gillett, an analyst at Forrester Research Inc.

“The world we’re headed to is where you don’t have to think about which gadget has your stuff,” Gillett said. “As people get their content organized around one of these personal ecosystems, then it will be incredibly sticky because migrating won’t be convenient.”

Photographer: David Paul Morris/Bloomberg

Steve Jobs, chief executive officer of Apple Inc., unveils the iCloud storage system at the Apple Worldwide Developers Conference 2011 in San Francisco, California, on Monday, June 6, 2011. Close

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Photographer: David Paul Morris/Bloomberg

Steve Jobs, chief executive officer of Apple Inc., unveils the iCloud storage system at the Apple Worldwide Developers Conference 2011 in San Francisco, California, on Monday, June 6, 2011.

Medical Leave

The event marked Jobs’s second public appearance of 2011. Though he has been on medical leave since Jan. 17, Jobs remains involved in Apple’s decision making. His absence is the third since 2004 as he copes with a rare form of cancer.

Apple’s new music feature, called iTunes Match, will scan every song in users’ libraries and match it with a copy in the cloud. That means customers don’t have to upload all their music song by song. That’s a requirement on rival services.

ICloud will be available this fall as a free download, when Apple releases its new iOS operating system for mobile devices. The service will include 5 gigabytes of free storage for users’ files, plus unlimited room for purchased apps and books, as well as recent photos.

The new version of iOS, which runs the iPhone, iPad and iPod Touch media player, won’t require users to plug in their devices. Applications and files will be updated wirelessly.

Facebook, Twitter

The software has other new features, such as a notification system to alert users when they get text messages and updates from applications such as Facebook. It also will make it easier to see Web articles and save them for future reading.

Photographer: Monica M. Davey/EPA

Steve Jobs, CEO of Apple Inc. Close

Steve Jobs, CEO of Apple Inc.

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Photographer: Monica M. Davey/EPA

Steve Jobs, CEO of Apple Inc.

A new Twitter Inc. partnership, meanwhile, will help users access the social-networking service and post photos. And a feature called Newsstand lets customers purchase and organize newspaper and magazine subscriptions for the iPad and iPhone.

The company said it now has more than 425,000 applications in its App Store, which provides software for iOS devices. The App Store competes with Google’s Android Market.

Apple also is adding 250 new features to the Mac OS X Lion software, including more touch-control options and a service called AirDrop that shares files over Wi-Fi, executives said today at the show.

By bolstering the Mac OS, Apple aims to build on its gains in the PC market. Apple accounted for 8.5 percent of U.S. PC shipments in the first quarter, up from 7 percent a year earlier, according to IDC. The company’s iPad tablet also helped steal away PC customers, the research firm said. Apple has sold more than 25 million iPads since the device debuted last year, the company said today.

The new Lion operating system will be available for downloading in July for $29.99, Apple said.

Shares Slide

Apple, based in Cupertino, California, fell $5.40, or 1.6 percent, to $338.04 today on the Nasdaq Stock Market. The shares have climbed 4.8 percent this year.

The company’s earlier foray into Web-based services, MobileMe, got off to a slow start, dogged by breakdowns, including one that kept users from sending or receiving e-mails. MobileMe, with a $99 annual subscription fee, eventually gained 3 million users, according to Forrester. That’s a fraction of the potential customer base for iCloud.

“We learned a lot,” Jobs said today. MobileMe “wasn’t our finest hour.”

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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