After months (years?) of rumors and speculation, Apple themselves broke the iCloud story in a rare press release last week, making the cloud service an official part of the WWDC 2011 keynote. So what is iCloud and how will it rock your world? Read on…

Following a rousing look at Mac OS X 10.7 Lion with Phil Schiller and an extensive look at 10 of the 200 new features in iOS 5 with Scott Forstall, CEO Steve Jobs returned to the stage to finally reveal what the company has in store for iCloud. “Keeping these devices in sync is driving us crazy,” Jobs reveals, touting the company’s “great solution” to the problem that will essentially demote the PC and Mac “to just be a device.”

“We’re going to move the digital hub, the center of your digital life, into the cloud,” Jobs announced. "iCloud stores your content in the cloud and wirelessly pushes it to all your devices. It automatically uploads it, stores it, and pushes it to all your devices."

Referring to the introduction of MobileMe as “not our finest hour,” Jobs reveals that the MobileMe apps have been rewritten “from the ground up” to work on iCloud. In addition to the usual MobileMe features, iCloud will introduce calendar sharing with me.com email improvements, all ad-free.

So what will this service cost? Absolutely nothing. “As of today this product ceases to exist,” Jobs announces, cementing longstanding rumors that MobileMe would finally abandon its $99 per year pricing model.

Jobs moves on to show how iCloud will work in the App Store on your iOS device, allowing you to see at a glance which apps you own, even if they’re not currently installed. Tap on the cloud icon and the app is pulled down to your device -- buy a new app and it will get pushed to any other device you own. Jobs claims the service is “for those people who want to be completely PC-free.”

What about backup? All of your content will be wirelessly backed up to iCloud including music, books, photos and videos as well as device settings and even app data, all over Wi-Fi. When you buy a new device, simply type in your Apple ID and password and all of your content gets pushed right to the device, no iTunes necessary.

Of course, Apple isn’t content to stop there, moving on to three new features related to iCloud. First up is Documents in the Cloud, which basically pushes documents created in Pages, Numbers and Keynote to the cloud, where they can easily be accessed from any other device. In fact, Jobs claims the iWork iOS updates released last week already have this new feature baked right in.

iWork vice-president Roger Rosner comes on stage for a demo of how the new service works with Keynote and Pages. “I stick the phone in my pocket and I forget about it,” Rosner exclaims. “When I get home, pick up the iPad and fire up Pages, and the document thumbnail has already been updated.”

Jobs claims that Documents in the Cloud “really completes our iOS document storage story. A lot of us have been working for 10 years to get rid of the file system so the user doesn’t have to learn about it.” Of course, Documents in the Cloud isn’t just about Apple’s own iWork, and the company is releasing a full set of iCloud Storage APIs for developers to take advantage of the new technology, which works across all iOS devices as well as Macs and PCs.

Next up is Photo Stream, which aims to alleviate the task of pushing photos to your various devices after returning home from a vacation or other event. Rather than require a separate app, the service will be baked into the existing Photos app as a separate album. Photos saved in iPhoto on the Mac (or the Pictures folder on a PC) will get pushed to the service as well as to devices like the Apple TV -- but only for the last 1,000 photos, which will be kept for 30 days.

Last but not least, Jobs moves on to iTunes in the Cloud, which aims to eliminate the problem of large music collections and small mobile storage on devices. "It's the same old story,” Jobs laments. “I buy something on my iPhone and it's not on my other devices. I grab my iPod and I go to listen to that song and it ain't there!"

Apple plans to address the issue by allowing the mobile iTunes to show which tracks you’ve purchased and allow you to download them on the portable device at no additional charge. "This is the first time we've seen this in the music industry -- no charge for multiple downloads to different devices,” Jobs notes.

Mobile iTunes will display recently purchased tracks from desktop iTunes on your device through a new tab, and you can download it straight to the device with just a tap. Users can also set up a device to automatically download any new purchases made on other devices as well.

iCloud music downloads are the full 256Kbps AAC and you’ll be able to push them to up to 10 devices -- and the service will be completely free to the user. "We're making it free, and we're very excited about it,” Jobs concludes. “So that's iCloud. It stores your content and pushes it to all of your devices, and it's integrated with all your apps."

iCloud will be set up by default on new iOS 5 devices, with 5GB of storage for email, documents and backup and the service will be launched alongside iOS 5 in the fall. iTunes in the Cloud will kick off today for developers with a new iOS 4.3 beta. The service also includes a new $24.99 offering called iTunes Match which is covered extensively in a separate post.

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