Apple Shares Fall During Its Annual Conference

Apple Inc. Chief Executive Steve Jobs used the company's annual developers' conference to show off a widely anticipated series of new products and services that were highlighted by a new cloud-based version of iTunes.

Market reaction to Apple's announcements was muted, as the company's shares fell $5.40, or 1.6%, to close at $338.04. It was the biggest one-day decline in Apple's stock since May 16.

In a presentation at the Apple worldwide developer event in San Francisco, Jobs said that the maker of consumer electronics is debuting a free, online service dubbed iCloud, which will let users access media via the Internet on multiple devices.

The iCloud service had been widely expected

The iCloud service had been widely expected, however many Apple observers had wondered whether the company might use its annual event to reveal a surprise offering, just as a new version of its popular iPhone.

One of the most anticipated features unveiled at WWDC was Apple's cloud music service, in which music - and in the long run video - is supposed to be convenient and ubiquitous. Nevertheless what does it in effect mean for consumers, and will they adopt it? Peter Kafka and Ethan Smith discuss.

However, word of a new iPhone was not to be heard, as Jobs and other Apple executives kept the event's focus on upgrades in the company's software offerings.

At Apple's Worldwide Developers Conference, the company's iCloud product "stole the show" because the system will "increase the stickiness of the Apple ecosystem," says Brian Marshall, an analyst with Gleacher & Co. Interview with MarketWatch's Rex Crum in San Francisco.

The new iTunes in the cloud service includes a feature

The new iTunes in the cloud service includes a feature by which earlier purchased songs will be available to be downloaded to any iPhone, iPad, iPod touch or Mac computer connected to iCloud. Apple is as well offering a new service called iTunes Match, which for $24.99 a year will scan a person's iTunes library, match songs with Apple's catalog of 18 million songs, and make those songs that match available to be accessed through the cloud.

Apple's iTunes store has been the No. 1 music seller in the United States for several years. But there has been a trend toward music being hosted in so-called cloud environments, where a consumer can upload music to a server and at that time get that music via any computer or mobile devices, just as a smartphone.

The steps that Apple

Jobs said the steps that Apple was taking into more cloud-based service are part of a progression the company has been on for years to make people's digital items easier to get.

The event Monday marked just the second time that Apple's chief executive has appeared in public at an company event since taking a medical leave of absence previously this year.

History of health issues

Jobs has a history of health issues, having gone through successful treatment of pancreatic cancer several years ago, along with a liver transplant. Neither Jobs nor Apple has disclosed what has caused him to take his current medical leave from the company he co-founded.

Looking thin and displaying somewhat less energy than at previous Apple events, Jobs more often than not deferred to Apple's top executives Phil Schiller, Scott Forstall and Eddy Cue to talk about the new features of the Mac and iPhone operating systems. He was on the stage the longest for the unveiling of the iCloud service.

Brian Marshall, an analyst who covers Apple for Gleacher & Co., said Apple's moves were to be expected, and show that the company wants to remain in the lead in terms of digital research.

The needle financially

"This might not move the needle financially, however Apple knows this will appeal to a lot of its clients and tie that Apple universe closer at the same time," he commented.

In addition to the iCloud service, Jobs showed off the at once version of the Mac operating system, called Lion. The new operating system will be available online via Apple's Mac App Store for $29.99 in July.

Look at iOS 5

He as well gave a look at iOS 5, the newest upgrade to the operating system for the iPhone, iPad and iPod touch. The iOS 5 upgrade will come with a feature called PC Free that will let users set up their devices wirelessly without having to connect it to a computer, as had been earlier required. The update will be released this fall.