Tess Vigeland: The Apple faithful flocked to San Francisco today for their annual i-pilgrimage. It's the kickoff of the company's Worldwide Developers Conference, complete with a keynote address by Steve Jobs.
The conference is usually known for its new gadget announcements. But things were a tad more subdued this time around. Marketplace's technology correspondent Steve Henn has been keeping an eye on events for us and joins us from Silicon Valley. Hey Steve.
Steve Henn: Hey, how are you?
Vigeland: So any surprises today from Apple?
Henn: Well, you know, the real surprise was there wasn't a surprise. Usually, there's a lot of anticipation about some shiny, fabulous, beautiful new gadget that Apple will unveil. But this year, Apple released a press release ahead of time saying this event would focus just on new software for the Mac as well as its mobile devices -- the iPhone, the iPad -- and Steve Jobs is unveiling the iCloud, Apple's new free cloud-based service. And that was all we got.
Vigeland: Well, I'm sure that there are some folks out there who are, perhaps, a little cloudy about the cloud. Tell us exactly what it is.
Henn: For the last few years, it's been a big fad among businesses, and it's this idea that you could move all of your files and your data to servers in remote locations and then you can access them from anywhere. For consumers, it's often been a hassle; it's difficult to get all of your music uploaded into a remote server. And Apple is trying to make this whole process as easy as possible. So if you own music in iTunes, you will be able to access it from anywhere; same for books, your photoroll if you take pictures with your iPhone -- it will be automatically be pushed out, not just to other Apple devices, but also your PC. And they're giving this away for free, offering consumers up to five gigabytes of storage, so it's quite a deal.
Vigeland: So if they're offering it for free, how are they going to make money off of this?
Henn: One possibility is they could sell extra storage space. They're also offering a service if you have a big CD collection and you've made digital files out of it, you could load that on and they'll charge you $25 a year. Personally, I really want to read the privacy policies on the service, because if you and I move our entire lives into the iCloud, they're going to know an awful lot about us. And that could mean lots of new marketing opportunities.
Vigeland: Now I know the faithful were hoping that Jobs would unveil a new phone, so was there disappointment when he didn't?
Henn: Yeah. I think there's some. And there's probably some disappointment among Apple shareholders, too. And you know, Apple's unveiled the new phone at this event every years for the last four years, and it's actually really hard to overstate how important the iPhone is to Apple's revenue. Some folks estimate that for every one million iPhones they sell, they earn $660 million. Last quarter, they sold 18 million iPhones.
Vigeland: Well Steve, that's got to spark some questions about why that is. Are they off their game because Jobs has been on indefinite medical leave since January 17th?
Henn: Most analysts I've talked to don't think so. And Steve Jobs was at the event today, he walked out to James Brown, you know, "I Feel Good." And he was his usual, charming self. And they also have a really deep bench of executives. For now, I think many analysts aren't too worried about it.
Vigeland: It is, however, the first summer in a while without lines around the block, isn't it, at an Apple store?
Henn: Yeah, that's true.
Vigeland: All right, Marketplace's Steve Henn, thanks so much.
Henn: Sure thing.