Apple Reveals Ad-Supported iTunes Radio, iOS 7, and OS X Mavericks

Apple is introducing a new vehicle for advertisers to reach iOS device users in a musical setting. ITunes Radio, a free music streaming service announced by Apple today, will be supported by ads delivered on the company’s mobile ad platform. Apple has been relatively quiet about the iAd platform that it launched three years ago, but now the company appears to be reorganizing its advertising business to sell and deliver audio ads on a service that’s been long anticipated by industry watchers.

ITunes Radio will be built into Apple’s latest mobile operating system, iOS 7, making the service available on the iPhone, iPad, iPod Touch, Apple TV, and iTunes on PCs or Macs. ITunes Radio will also be available without ads to subscribers of iTunes Match, a service that makes users’ entire iTunes and other music libraries available via iCloud. The music streaming service, which strikes many similarities with Pandora, will launch in the U.S. this fall and Apple plans to add more countries over time.

Apple announced the new ad-supported service during the kickoff keynote at its annual Worldwide Developers Conference, where the company also revealed its latest operating systems for iOS and Mac devices, a new MacBook Air lineup, iCloud updates, and a sneak peek at the next Mac Pro.

Apple made the biggest splash today with the introduction of iOS 7, the latest operating system for Apple’s family of iOS devices. Apple CEO Tim Cook calls it “the biggest change to iOS since the introduction of the iPhone.” The refreshed operating system provides users with a more lively, simple, and coherent experience across the entire platform of apps and services. A new grid-system achieves a more “harmonious relationship” between different items and the use of translucency gives users a sense of context, depth, and vitality, says Jony Ive, SVP of industrial design, in a video Apple played to showcase the changes.

“I think there is a profound and enduring beauty in simplicity, in clarity, in efficiency. True simplicity is derived from so much more than just the absence of clutter and ornamentation. It’s about bringing order to complexity,” Ive continues in the video. With iOS 7, Apple wants to create an interface that is “unobtrusive and differential,” he says. “We see iOS 7 as defining an important new direction, and in many ways the beginning.”

Apple’s iOS 7 also brings a new “liveliness” to iOS devices, says Craig Federighi, SVP of software engineering. “As you move the device in your hand, it actually tracks your motion” and a new design feature called Parallax lets users see behind the icons on the display with improved scrolling, he adds. Twitter, Wikipedia, and Bing search results are also being integrated into the next version of Siri in iOS 7.

Taking some jabs at Google, Cook points out that iOS 6 is currently installed on 93 percent of active iOS devices. “More than a third of Android users are using an operating system that was released in 2010,” he adds. “If you do the math, you would find that iOS 6 is the world’s most popular operating system and in second place is a version of Android that was released in 2010.”

Apple’s latest numbers indicate no loss of momentum despite the struggles the company has had on Wall Street of late. The App Store, which celebrates its fifth birthday next month, has served more than 50 billion app downloads to date, says Cook. The store has more than 900,000 iOS apps (375,000 specifically made for the iPad) and Apple has paid out $10 billion to iOS developers to date with half of that money doled out in the last year alone. “That’s three times more than all other platforms combined,” says Cook.

“We have more accounts with credit cards than any store on the Internet that we’re aware of,” he adds, noting that Apple currently has 575 million active iTunes accounts and 300 million iCloud accounts. The infrastructure that powers Apple’s iCloud services has delivered more than 800 billion messages on iMessage and 7.4 trillion push notifications.

Calling upon the places that inspire Apple’s design and software teams here in California, the next version of OS X will be called “Mavericks.” The famed spot is home to some of the world’s biggest and most extreme waves, and it’s just a 45-minute drive northwest from Apple’s headquarters.

Mac OS X Mavericks will be released this fall, but fans of the MacBook Air won’t have to wait so long. A new lineup of 11- and 13-inch display MacBook Airs begin shipping today at a starting price of $999. Apple says it has improved the battery life of the iconic and thin notebooks by nearly double from the previous versions. Finally, the new Mac Pro that Apple plans to begin shipping later this year offers a complete redesign and fresh look for the power-user machine packed into one-eighth the volume of the previous generation. “Can’t innovate anymore, my ass,” beamed Phil Schiller, SVP of marketing, as he offered a sneak peek of the product that will be assembled in the U.S.

The Mac install base is now at 72 million, double from five years ago, and 35 percent of users are using the latest version of Mac OS X. “That compares to Windows 8, which is kind of struggling to reach 5 percent,” says Cook. Mac sales growth is up 100 percent, versus a “paltry 18 percent” for the PC over the last five years, he adds.