Apple Snips the Cord on iTunes, Reveals iCloud Strategy

11:58 a.m. We’re wrapping up. Thanks for tuning in! 11:57 a.m. Steve says this is Apple’s third data center. It’s in North Carolina. “It’s full of stuff. Full of expensive stuff. We are ready for our customers to start using iCloud, and we can’t wait to get it in their hands.” 11:55 a.m. iTunes Match: […]

11:58 a.m. We’re wrapping up. Thanks for tuning in!

11:57 a.m. Steve says this is Apple’s third data center. It’s in North Carolina. “It’s full of stuff. Full of expensive stuff. We are ready for our customers to start using iCloud, and we can’t wait to get it in their hands.”

11:55 a.m. iTunes Match: You scan and match, annual price is $25. So that’s iTunes Match and it goes along with iTunes in the cloud.

11:53 a.m. “Now there’s one more thing,” Jobs says. It pertains to iTunes in the cloud. There are songs you ripped yourself. There’s iTunes Match. Matches up your library with iTunes store. They’re scanning and matching your library so they don’t need to upload that large part of the memory. Matched songs upgraded to 256kb AAC DRM-free. iTunes Match costs $25 per year.

11:52 a.m. Developers can get hands on iCloud beta today. iTunes in the cloud portion will run for users on iOS 4.3 beta, so everyone can get their hands on it and get it on their devices. iCloud ships with iOS 5 this fall.

11:50 a.m. iCloud stores your content and wirelessly pushes it to all your devices, and it’s integrated with your apps, so everything happens automatically. So how do you get it? You upgrade your iOS device with iOS 5, type in your Apple ID and password, and there’s a switch to turn on iCloud. Everybody gets 5 gigabytes of free storage for Mail, Documents and Backup. They’re not counting music, apps or books toward that 5 gigs, nor are they counting Photo Stream.

11:49 a.m. iTunes in the cloud - you can share music with up to 10 devices. Steve is wrapping up iCloud. All the iCloud-integrated apps are free.

11:48 a.m. Apple shows the iTunes Store on an iPhone. You buy and the song downloads to the iPhone and it’s already on your iPad, too. Now when you buy a song on one device it automatically downloads to all devices without doing any work, and that’s iTunes in the cloud.

11:47 a.m. It’s worth noting that only songs you *purchase* are going to be syncable to the cloud. Doesn’t appear that songs you rip from CDs or pirate are going to be able to sync.

11:46 a.m. “This is the first time we’ve seen this in the music industry. No charge for [dowloading to] multiple devices,” Steve says. They’re demoing it now.

11:45 a.m. Last but not least is iTunes Music. Here’s the big one. For songs you already bought, there’s a Purchase history button and you can see the songs you bought and download to any of your devices at no additional charge.

11:44 a.m. Steve’s back on stage. “Isn’t that awesome?” Summary: Photos you take or import upload to iCloud, iCloud stores each photo for 30 days, devices store last 1,000 photos, and Macs and PCs store all photos.

11:42 a.m. Eddy Cue, VP of internet services, is demonstrating Photos in the cloud. He takes a photo on the iPhone, then picks up an iPad, and the picture is right there in the Photo Stream. Then you can save permanently by moving it to an album. On the Mac, the Photo Stream shows the photo you just took, too.

11:40 a.m. On a Windows PC the Photos app will sync with a Pictures folder. And Photos will sync with Apple TV, too, so you can see the photos right on your Apple TV. One problem we face is that photos are large and consume a lot of memory, so Apple is going to store the last 1,000 photos on devices to free up space. Any photos you want to keep permanently can get moved to an album and they stay forever. On the server photos will be stored for 30 days.

11:39 a.m. In addition you can import photos taken with another camera on your Mac, and it will push those photos to the iOS devices wirelessly.

11:37 a.m. iCloud works across all iOS devices and Macs and PCs, too. Next is Photos in the cloud. Photos will sync across all devices. When you snap a photo on your iPhone, it gets pushed to your iPad, too.

11:36 a.m. Steve returns on stage. “Documents in the cloud really completes our iOS storage story,” Jobs says. This gets rid of the file system so you don’t even have to think about it, Steve says. iCloud storage APIs will be available for developers to integrate it into their third-party apps.

11:34 a.m. Rosner loads the Keynote presentation app on iPad. If you created a presentation on your iPad and want to show it to someone but don’t have your iPad, you can just fire up Keynote on your iPhone and show it to him there. Keynote sees all your presentations you’ve been working on in the cloud and downloads them.

11:33 a.m. The first one: Documents in the cloud. If you create a Pages document, it automatically stores it in the cloud and pushes it to all your devices that have Pages. That’s in Pages, Numbers and Keynote. Roger Rosner, VP of iWork, is giving a demo.

11:32 a.m. Automatic daily backups to iCloud over Wi-Fi: purchased music, apps, books, camera roll, device settings, app data all get pushed to the cloud. “But we couldn’t stop there,” Jobs says. There are three more apps part of iCloud.

11:31 a.m. Wireless backups have been added to the cloud. Once daily an iOS device’s content gets backed up to the cloud. If you lose your device and get a new one, you can just automatically restore from backup wirelessly.

11:30 a.m. Next, iBooks in iCloud. Purchase history of your books on your device, if you want the book on your other iOS device, you push the download from the cloud button and get it there, too. Bookmarks are synced between devices, too.

11:29 a.m. “But we didn’t stop there,” Jobs says. There are three more apps brought into the iCloud universe. The App Store: all purchase history is shown on all your devices, even if the apps’ not there. There’s a download from the cloud button, and if you want that app on your other device, you push that button and it’s automatically there, at no extra charge.

11:28 a.m. MobileMe ceases to exist and is re-branded as iCloud. It’s free, whereas MobileMe used to cost $100 a year.

11:27 a.m. And then we have Mail. Mail is even better now at me.com. New messages are pushed to all your devices, inbox and folders kept up to date on all devices. There are no ads.

11:26 a.m. iCloud has calendar sharing to share your events with other customers. Calendar event gets pushed to the cloud and automatically pushed to Steve’s wife’s iPhone, for example.

11:25 a.m. The three apps in MobileMe were calendar, contacts and Mail. Apple has thrown them away and rearchitected them to be iCloud apps and put them on all their devices. A new contact on iPhone is automatically stored to the cloud and pushed down to other devices so they’re all in sync.

11:24 a.m. iCloud is completely integrated with your apps. Everything happens automatically and there’s nothing new to learn. “It just works,” Jobs says. “You might ask, why should we believe them, they’re the ones that brought us MobileMe.” Crowd laughs. “We learned a lot.”

11:23 a.m. “Some people think the cloud is just a hard disk in the sky,” Jobs says. “We think it’s way more than that. And we call it iCloud.” iCloud stores your content in the cloud and wirelessly pushes it to all your devices.

11:22 a.m. “We’ve got a great solution for this problem.” It’s all going to be stored in the cloud. If the iPhone takes some pictures, they go to the cloud, and they’re pushed down to the iPad, Mac, iPod Touch automatically.

11:21 a.m. Steve says 10 years ago Apple foresaw that the PC is going to become the digital hub for your digital life. Digital photos, music, etc. It’s broken down now because devices have changed - they now all have photos, video, and we want to get that on all our devices. We have to sync to do all that right now. “Keeping these devices in sync is driving us crazy,” Jobs says.

11:20 a.m. Now we’re moving on to iCloud. Steve reappears on stage. “You like everything so far?” (Applause.) Steve’s going over iCloud, “We’ve been working on this for some time now.”

11:19 a.m. iOS 5 shipping to customers this fall. iPhone 3GS and iPhone 4, iPad and iPad 2 and fourth-generation iPod Touch are supported.

11:18 a.m. There are new multitasking gestures to flick between apps, too. For developers, there’s a NewsStand Kit, Core Image APIs for photo apps (red-eye enhancement, for example), alnd lots more. The developers get iOS 5 today.

11:17 a.m. Scott’s going over the rest of the features. AirPlay mirroring - you can mirror your iPad 2 to the television wirelessly. Wi-Fi sync to iTunes: now you can get your iOS device to find iTunes and automatically sync and back up.

11:16 a.m. iMessage sends over Wi-Fi as well as 3G. Looks like Apple is working around traditional SMS and building its own iOS-exclusive messaging platform. Interesting.

11:14 a.m. Showing demo of iMessage. Chatting on an iPhone updates the conversation on an iPad as well. It shows a read receipt to show that you know the recipient has read it.

11:13 a.m. iMessage does text, photos, videos, etc. You can see when the message has been delivered or read. You can tell when someone starts typing. iMessages are pushed to all your devices, so if you start a conversation on your iPad and later pick up on your iPhone, you can see the entire conversation to date. Support for 3G and Wi-Fi, and everything is encrypted and sent over the air.

11:12 a.m. Next is iMessage, an upgrade for the SMS app. New messaging service between all iOS users. iMessage supports the iPhone, iPad and iPod Touch.

11:11 a.m. Now you can get recommended friends in Game Center. There’s also game discovery, a recommendation tool for finding more games. There’s support for turn-based games built into the OS. Scrabble, for example, doesn’t have to create its own turn-based system.

11:10 a.m. Next is Game Center. There are 100,000 game and entertainment titles in the App Store. Game Center helps you find players to play against, and compare how you’re doing against your friends. In 9 months Apple has 50 million Game Center users. Xbox has 30 million users, and it’s been around for years.

11:09 a.m. Now in iOS 5, when you take an iPhone or iPad out of the box, you’ll see a welcome screen. No more “Connect to iTunes.” You can set up and activate the device and you are ready to go. Software updates are now over the air. You can download and install an OS update right on the iPhone. “Now if you want to cut the cord, you can,” Forstall says.

11:08 a.m. Feature 8: “PC-Free.” This is big. The screen shows an icon of scissors cutting the iPhone USB cord. “We’re living in a post-PC world.”

11:05 a.m. Built-in dictionary built into the mail app now. Tap a word to look it up in the dictionary. Also, systemwide feature: a new variant to the keyboard in iOS 5 for people who like to tap with their thumbs. There are some grab handles, and you can drag up the keyboard and it splits it into two small keyboards, for thumb typing.

11:03 a.m. Mail has been upgraded. You can drag contacts. You can flag messages. You can search entire message through the phone and on the mail server. on iPad there’s an option to swipe to show the messages tab, and you can swipe it away to view just the message.

11:00 a.m. You can use the physical volume button to take a picture now. You can pinch to zoom inside the camera, and you can lock the autofocus.

10:59 a.m. Next is an upgraded version of Camera. Scott says iPhone 4 is one of the most popular cameras on Flickr. Now it’s way faster to get in and take a photo - a shortcut on the lock screen. When you wake up your phone there’s a camera icon in the lower right, you tap it and you’re ready to take a photo.

10:58 a.m. Next up is Reminders for to-do lists and events. iOS will remind you to do these things in addition to storing the list. You can store dates, events. Example: “Remind me to call my wife when I leave Moscone West today.” And it will send you a reminder to do that. Reminders are integrated into iOS as well as iCal on the Mac.

10:58 a.m. If you like a webpage and want to tweet about it, you tap a Tweet button. A Twitter window pops up and you tap Send and it’s tweeted with the URL.

10:57 a.m. There’s a Reader button now to make a webpage look cleaner, stripping out all the junk and just giving you the text and photos, just like Reader in desktop Safari.

10:56 a.m. Next feature is Tab browsing. Full tab browsing in iOS Safari, similar to what we have on desktop browsers. “It is lightning fast to switch between windows now - just tap on it and you’re there,” Forstall says.

10:55 a.m. Reading List in Safari. A simple way to save a story to read it later. The Reading List syncs across all iOS devices, and Safari on Mac and Safari on Windows.

10:53 a.m. Next is Safari. iOS has 64 percent of web browsing on mobile devices. Android has 27 percent. In Safari there’s an option to e-mail the content of a story. You get the link plus the content in your composed window.

10:52 a.m. Twitter is built into Photos/Camera apps. If you want to tweet a photo you took, you can hit a Tweet button and you can type a message and tweet the photo. You can tweet videos from YouTube, and Apple has added Contacts Integration. You can use Twitter to automatically update the photos in your Contacts list with their avatars.

10:51 a.m. Next we’re talking about Twitter. 1 billion tweets are sent per week. Apple’s making it easier to use Twitter on iOS products. Single sign-on: You can enter your username and password and it keeps it that way so you don’t need to re-sign in.

10:50 a.m. When you purchase mag or newspapers apps they’re automatically downloaded and placed in the News Stand. Looks like a book shelf. It’s basically a modified folder UI just for publications. The cover for each mag or newspaper app shows the front page of the publication.

10:48 a.m. Feature #2: News Stand for newspapers and magazines. Many newspapers and magazines have signed up to support subscriptions already through iOS. Vanity Fair, Oprah, WIRED, The New Yorker, The Daily, The New York Times, etc.

10:47 a.m. Dismiss the Notification Center by swiping up. You tap on a notification to take you to the corresponding app.

10:46 a.m. The Notification Center has your missed calls, new e-mail notifications, push updates from apps. Notifications are no longer interrupting. If someone sends you a text message, an animation from the top shows up. This looks kind of like HP’s TouchPad notifications.

10:45 a.m. Currently when you get a notification it interrupts you - that blue box. A solution that solves those issues: Notification Center. It’s a single place which combines together all of your notifications. You can get it to it anytime from anywhere just by swiping your finger down from the top to reveal the Notification Center.

10:44 a.m. #1: notifications. Push notifications were popular (I hate them personally on iOS, they’re very intrusive). Better UI for notifications now.

10:43 a.m. Moving on to iOS 5. “This is incredible for our developers and our customers,” Forstall says. 1,500 new APIs and enhancements to tools. For users there are 200 new features. We’re going through 10.

10:42 a.m. Apple has paid out $2.5 billion to developers in the App Store. Scott shows some apps: Tiny Wings, HBO Go for iPad, a CT scan app for doctors. Business apps for holding a virtual meeting. Apple’s stores have 225 million accounts all with credit cards and one-click purchasing.

10:41 a.m. And of course there’s the App Store. “The size and momentum of the App Store is really hard to fathom,” Forstall says. 90,000 iPad apps. Customers have downloaded 14 billion apps from the App Store.

10:40 a.m. In the first 14 months Apple has sold 25 million iPads. “We created a whole new category of device with the iPad, and sold over 25 million,” Forstall says. 15 billion songs sold through the iTunes music store. That makes it the number 1 retailer of music in the world. iBooks store: all 6 major publishers have signed up and are providing books. 130 million e-books sold.

10:39 a.m. Scott Forstall, VP of iOS software, is coming on stage. To date, Apple has sold 200 million iOS devices. That makes iOS the number 1 mobile operating system with more than 44 percent of the market. Android has 28 percent, RIM 19 percent, other 9 percent.

10:38 a.m. OS X Lion will be available in July. So that’s Lion. Next we’re talking about iOS 5.

10:37 a.m. Mac App Store: You can use it on all your personalized authorized Macs. You don’t have to buy multiple copies. Cost of Lion: In the past, OSX has been $130. This time Lion will be priced at $30.

10:36 a.m. In the past OS X came on an optical disc. No more. Now it will be available only in the Mac App Store. This will make it the “easiest upgrade you’ve ever seen,” Schiller says. You find it in Mac App Store and download it and it starts the upgrade process right there.

10:35 a.m. Summary of smaller features: FaceTime built in, resize from any edge, dozens of others. Gesture tracking, momentum scrolling, etc.

10:34 a.m. To file a conversation away you put it in a folder if you want and you’re done. That wraps up the Mail demo. Schiller is wrapping up the Lion demo.

10:33 a.m. You can combine search “tokens” to find a specific message. For example: “Phil Schiller” “restaurant review” “Last Month.” Looks pretty smart.

10:32 a.m. Craig demos the new Mail. Message list is on the side. There’s a Favorites bar across the top to click through the mailboxes. The new search starts auto-completing, like if you type P it will show Phil Schiller.

10:30 a.m. Feature number 10: Mail. Completely new version of Mail in Lion. It looks a lot like the iPad’s Mail app. There’s a “conversation view.” If you have a conversation going, the threads get difficult to follow. In Lion the conversation view shows messages stacked on top of each other so you don’t have to click on each individual thread. You just scroll down to see the back-and-forths.

10:29 a.m. Feature number 9: AirDrop for sharing documents. You’ve got a computer, your friends have their computers. AirDrop is a peer to peer Wi-Fi based network. People around you running AirDrop at the same time - you see their pictures in the AirDrop window. You drag a document on top of another AirDrop user and you can share it. It’s auto-discovery and auto setup. We have confirmation on both ends just to be safe.

10:26 a.m. Craig demonstrates documents. When you quit Pages and relaunch it, it brings back the document where it left off. A “perfect restore,” Craig says. Pages is also keeping a history of the document while you’re editing. Browsing all versions takes you into a view where all the versions are cascaded on top of each other. Click on the version you want to use and it will restore it.

10:25 a.m. In the Mac App Store, Craig adds Twitter to his Mac. It lifts up out of the Mac App Store and flies into the LaunchPad, and it’s ready to use. You can drag apps on top of each other to automatically create folders.

10:24 a.m. Craig’s going to demo AutoSave, Resume and LaunchPad. Gesture with a four-finger pinch to get into the LaunchPad mode.

10:23 a.m. Autosave saves in “Versions.” You can browse all versions and see all the different saves in one view - looks like the Time Machine backup screen.

10:21 a.m. Feature number 7: AutoSave. Lion is going to help you automatically save a document in the background. Your work is just being saved for you. If you don’t like the work you did and it autosaved over what you did previously, you can click “Revert to Last Opened.”

10:20 a.m. Resume - when you quit an application and re-open it, it picks up where it left off. Like if you’re using Safari and close it, it’ll bring you back to the webpage you were looking at as you left it.

10:19 a.m. LaunchPad in Lion: make a pinch motion on the trackpad and a board of all your applications pops up, and you can easily choose between them. Looks just like the iPad springboard.

10:18 a.m. So the Mac App Store is built into Lion. In-app purchases will be available. Push notifications, and a sandboxing method now to make apps more secure. And there’s delta updates to push out updates faster.

10:17 a.m. Next up, the Mac App Store. Schiller says it’s “the best place to purchase and discover new software applications.” In the last six months, something “incredible” has happened: it’s become the #1 PC channel for buying software, surpassing Best Buy, Walmart, and others, says Schiller.

10:15 a.m. Three fingers to swipe up on the trackpad and you’re in Mission Control. On top there’s a separate panel for your full-screen apps, your desktop, and your Dashboard. This looks similar to the app drawer in iOS for app switching.

10:14 a.m. PhotoBooth looks great in full-screen - the camera view takes up the entire screen. You get a better look at your mug.

10:13 a.m. Next up, full-screen apps. On iPhoto there’s an arrow button that you click in the upper right corner to let the app expand and fill the entire screen. Safari supports full screen as well. You two-finger swipe to switch between full screen applications. To exit full screen you click in the upper right to take you out.

10:12 a.m. Craig’s giving a demo of these three features working together. Safari no longer has scroll bars because we can push the content with our fingers using the multitouch trackpad. You can also zoom in to the webpage by pinching. Smart Zoom: You double tap to zoom in, double tap to zoom out, just like on the iPad.

10:11 a.m. New feature called Mission Control, which Schiller says will be one of the most useful. A gesture gives you a bird’s eye view of everything in your system. This is the sequel to Exposé.

10:10 a.m. Showing an example of full screen in Safari. iCal running full screen. No bars, just the content filling the screen -- very iPad-ish.

10:09 a.m. Top right corner has a button to expand applications to full screen. The app fills the entire screen, and you can swipe to the left or right to get back to your desktop.

10:08 a.m. First, multitouch gestures. Multitouch trackpads on all the notebooks, and Apple has learned a lot from iOS. Pinch to Zoom, swipe through photographs. This has implications across the system. Example: The scroll bar: You push the window with multitouch, by using two fingers and dragging down. The scrolling bars disappear when you’re not using them.

10:07 a.m. He shows a screenshot of the old Mac OS X to show the progress it’s made. Next up is Lion. 250 new features. We’re going to talk about 10 key features.

10:06 a.m. The Mac has outgrown the industry ever quarter for the past five years, says Schiller. Products like the new MacBook Air - “the whole PC industry wants to copy it.” The majority of Mac PC business is notebooks - 73%

10:05 a.m. Phil Schiller taking the stage and Craig Federighi to talk about OS X Lion. This product is all about the Mac, Schiller says. Now over 50 million active Mac users.

10:04 a.m. “If the hardware is the brain … of products, the software is their soul,” Jobs says. OS X Lion, iOS 5 and iCloud. We’re starting with Lion.

10:02 a.m. Steve says we’ve got an awesome morning. Over 5,200 WWDC attendees - sold out within 2 hours. “I”m sorry, this is the biggest place we could get.” Over 120 sessions, over 100 hands-on labs where you can take your code in and get help tuning it. Over 1,000 Apple engineers here to help you with coding.

10:01 a.m. We’re getting started! Steve Jobs takes the stage. People stand and applaud.

9:59 a.m. They’re blasting “I Feel Good” by James Brown. Groovy.

9:42 a.m.: We’re seated and getting pumped to get started. Yeow.

9:07 a.m.: Lots of energy in the room. Eager nerds and caffeinated journalists.

8:54 a.m.: Uhh, nice outfits.

8:45 a.m.: We're in line and setting up. This place is packed!

Jobs' keynote kicks off Apple's annual Worldwide Developers Conference, which runs until Friday. Expect to hear news on Mac OS X Lion and iOS 5, as well as the new iCloud online storage service.

Read Wired.com's previous coverage for a rundown of what we'll hear about at the event. Jobs' keynote starts 10 a.m. PDT, and Wired.com will be live-blogging the event. Stay tuned on this post for the news, or follow @Wired for Twitter updates in 140 characters or less.