Will Apple Take iTunes Into The Cloud?

Apple has slated a "big announcement" for next week, and the rumor mill is swirling over what Steve Jobs and Co. might showcase in San Francisco on Wednesday.

With a new iPhone recently under its belt, Apple most likely will focus on the music side of the house with an iPod refresh and a retread of its iTunes media service. The invitations that were sent out to potential attendees featured an acoustic guitar -- complete with an Apple cutout.

One major expectation is that Apple will launch the long-rumored cloud-based version of its iTunes music and video service. A cloud-based iTunes offering would let users store their music and video libraries in the cloud -- on Apple's servers, aside from on their PCs, Macs or own hard drives -- and stream music from any Internet-capable device. That would eliminate the need to always have your iPod by your side. It'd be like a MobileMe just for music.

Storing and streaming iTunes in the cloud would make perfect sense for Apple as users are now on more than one device -- an iPhone, an iPod, an iPad and a Mac -- and don't want to store their entire libraries on each of them. Consumers would dig it as their music collections would be more portable than before and take up less real estate.

A research note from Piper Jaffray analyst and Apple watcher Gene Munster indicated that a cloud version of iTunes could be on tap for next week, but that the service likely wouldn't be available for use until closer to the end of 2010.

"The company has indicated that the data center is on track to be completed by the end of CY10 and it will begin using it then," Munster wrote, according to Reuters. "We believe an announcement at the Sept. event is likely, but the service may not begin until late CY10. With Apple's growing family of connected devices (iPhone, iPad, iPod Touch, Apple TV and Macs) it only makes sense that Apple would deliver a cloud-based media service to leverage its competitive advantage in the space: devices."

Along with a potential cloudified iTunes, Apple is expected to reveal at the event a new version of the iPod Touch, an iPod that closely resembles the iPhone but lacks the phone capabilities; new social capabilities in iTunes; 99 cent TV show rentals through iTunes; and an updated version of Apple TV.