Why Apple's iCloud Announcement Matters

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Some people will tell you that because the oddsmakers aren't expecting a new iPhone from Apple today, this Steve Jobs keynote isn't a very big deal.

They're wrong.

This is the most important Apple announcement in recent memory. (Check out our LIVE BLOG of the event).


iCloud, the service Apple promised to announce, represents more than an updated iTunes service for the era of modern data centers. It is probably Steve Jobs's attempt to redefine the "Digital Hub" and finally succeed in an area where he has failed repeatedly: web services.

If it works, Jobs will have proven he can go toe-to-toe with arch-rival Google on its home turf. If not, Jobs will have given the world a peek at Apple's Achilles Heel.

If that sounds like a controversial assertion, consider Apple's recent history in web services: Apple's webmail product, .me email, is just mediocre next to alternatives like Gmail and Yahoo mail; the free version lacks key features like Exchange sync, and even the paid version doesn't work as well as Google's.

Apple's paid online service, MobileMe, adds cloud storage and photo sharing for $99 per year, and had a dreadfully buggy launch three years ago. Again, Google has more reliable offerings for free.

Cloud Computing - A CNBC Special Report
Cloud Computing - A CNBC Special Report

Ping, the music-based social utility Apple launched on iTunes last fall, is a disappointment for its failure to play nicely with Facebook. (Launching a mass-market social utility that doesn't integrate well with Facebook is like launching a tablet that doesn't do email.)

The shining exception in this category is Apple's online retail operation, which is second to none in its ability to create a top-notch experience bridging physical and virtual commerce.

So if Apple managed to grow into the most valuable company in tech why repeatedly failing on the web, why does iCloud matter? Why can't we just call this a "hobby" like Apple TV, and shrug if it fizzles?

Back to those two words: Digital hub.

Steve Jobs himself coined the term "Digital hub" more than a decade ago, referring to the PC. In ten years defined by a gadget explosion — digital cameras, iPods, webcams and more — the PC (or more specifically, the Mac) would be the platform that managed them all.

Apple's iLife suite was built around that idea: in iTunes, iPhoto, iMovie, iDVD and GarageBand, Jobs bet on a few key apps that would organize the chaos.

Now, in the post-PC era, the PC itself is no longer the hub. Why?

Because it's too limited. It's no longer practical to physically connect every device we carry to a PC to sync data; wireless networks are better at that. The PC itself used to be our most-used digital device, but now that role has been usurped by the smartphone.

So what's the new digital hub?

I would argue that it's the cloud. With its Android OS and a plethora of online services, Google has positioned itself to be the new hub where everything syncs. Facebook and Amazon are also well positioned.

Microsoft , particularly after the Skype acquisition, could also be a contender.

Will Apple be a player, too? Depends how great this iCloud service turns out to be.

EDITOR'S NOTE: Jon Fortt will be live blogging from today's Apple event beginning around 1pm/ET.

Questions? Comments? TechCheck@cnbc.comAnd you can follow Jon Fortt on Twitter @jonfortt