Apple's Jobs to take the stage as iCloud hype grows

Jobs, who has been on medical leave for months and last took the stage in March to present the iPad 2, will unveil the iCloud, a Web-based service that lets consumers stream music they bought to any Apple device, pitting it against rivals Google Inc and Amazon.com Inc.

That expansion into cloud computing is seen as crucial if the company is to stay competitive with increasingly popular open-sourced software, just as Google's Android operating system, according to analysts and investors.

The iCloud has the potential to make Apple's iTunes moreover powerful, making it tougher for rivals to keep up, Sterne Agee analyst Shaw Wu said.

"It looks like Apple will likely offer some base service for free," Wu said. "Competitors, including RIM, Google, Amazon and Microsoft already have a hard time competing with iTunes at this stage, nevertheless we believe will likely find it even tougher with iCloud enhancements."

The Moscone center in San Francisco -- ground zero in the launch of several iconic Apple gadgets just as the iPad -- was a hive of activity this week as workers put the finishing touches on banners featuring a giant Apple logo.

Apple has been busy wrapping up negotiations with major record labels to secure licenses for its iCloud service, which is as well expected to include a revamped version of its little-known MobileMe storage service.

The licenses will help Apple introduce scan-and-match innovation that scans a user's hard drive and provides access to music found there from the company's own servers.

Some analysts say the iCloud has the potential to be a new model for media consumption, which could as well spark more demand for Apple devices.

"iCloud by itself will not be a billion dollar revenue possibility," Chowdhry said. "It is an enabling innovation ... once you have things in the cloud, you can create new devices that been created right now."

There "truly could be" a surprise, said Current Analysis analyst Avi Greengart, who often attends Apple events. "Apple is known for just one more thing."

The WWDC venue in the past to unveil a new iPhone

Apple has used the WWDC venue in the past to unveil a new iPhone, however some sources told Reuters they did not expect the new model to appear until September.