• by Mark Walsh  @markfwal, June 6, 2011

With Apple making its long-awaited iCloud announcement today, one of the things I found most striking about the new service is that Apple won't charge for the basic offering. That's an uncharacteristic move for a company that's historically eschewed the let's-make-everything-free business model of the Internet.

Speaking at Apple's Worldwide Developer Conference, Apple CEO Steve Jobs said iCloud will replace the company's $99 a year MobileMe service, which he admitted "wasn't our finest hour." The new digital locker offering will basically let users store content and then transfer it wirelessly to all of their devices. That extends to things like contacts, calendars and email. It also syncs the App Store and App Bookstore. But Apple won't charge for multiple (if not unlimited) downloads to multiple devices.

By hitting a "purchase button" in iTunes, people can push material already downloaded to nine other Cloud-enabled devices. Of course, much of the speculation and anticipation about iCloud was about music, with reports Apple had signed deals with all the major labels in advance of the launch.

Despite some rumors, iTunes for iCloud won't be a subscription-based offering. Rather, users can download previously purchased music to all their iOS devices at no extra cost, and new purchases can be downloaded automatically to all their gadgets. The new wrinkle is iTunes Match, which scans a user's music library to identify any tracks that haven't been bought through iTunes. It then creates a DRM-free copy of those songs and uploads them to the cloud for users to access on any Apple device.

Not everything's free. Apple will charge $25 a year for iTunes Match. Apple's iCloud press release assured the scanning process would only take minutes, "instead of weeks to upload your entire music library," a dig at rival locker services from Amazon and Google which require users to manually upload music collections.

By doing away with the $99 fee it had for MobileMe and not hitting users with other fees in connection with iCloud, except for the $25 for iTunes Match, Apple showed it's more interested in locking users into its ecosystem than creating a new revenue stream. It's also trying to lure new users with a more attractive cloud storage option than Google or Amazon.

That's a smart strategy because it considers the big picture instead of trying to nickel and dime consumers. It creates what CNet columnist Larry Dignan last week called a halo effect for Apple. "The direct revenue attributed to iCloud doesn't matter as much as the value in the Apple chain," he wrote. Apple already dominates digital music with iTunes, and iCloud will only help the company tighten its grip.

What's more, Apple is making the "digital everywhere" concept a reality to an extent that hasn't been possible before. While many of the features Apple's digital locker includes aren't new, "iCloud brings all of these compelling features together in a compelling, easy-to-use and intuitive manner," noted Giles Cottle, a senior analyst at Informa Telecoms & Media, in a research note today about iCloud.

When it comes to packaging, distributing and selling digital media across platforms, Amazon, Google and Microsoft still have a long way to go to catch up with Apple.