Apple has ratcheted up the competition with rivals Google, Amazon and Microsoft to provide services to consumers over the internet with its new cloud product.
The centrepiece of iCloud offers users the ability to synch, store and listen to their iTunes music library from any device that connects to the web.
The free service will also allow consumers to use the web to access eight other key applications including photos, documents, books, contacts, calendar and e-mail.
Apple boss Steve Jobs returned from sick leave to tell the company's annual developer conference that iCloud was necessary because we were living in a post-PC world.
"It worked for the better part of 10 years but it has broken down in the past few years," said Mr Jobs, who added that synching everything from smartphones to tablets to iPods was driving people crazy.
"We're going to demote the PC and the Mac to just be a device, just like an iPhone, an iPad and iPod Touch, and we're going to move your digital life into the cloud," said Mr Jobs.
Industry watchers said Apple's first foray into cloud services was a clear shot across the bows of a number of its rivals.
"This is Apple going into everyone's territory - it's Google, it's Amazon, it's Microsoft," Lance Ulanoff, editor in chief of PCMag.com, told BBC News.
"I don't think these guys have a choice but to step on each other's toes. This is a very competitive environment and the cloud is where it is at.
"The concept of physical ownership is going to fade away for consumers and it is all about portals where you view or listen to your stuff. The cloud is the new battleground and the consumer will get the rainfall of benefits here," Mr Ulanoff added.
Popularising the cloud
The jewel in the crown of iCloud is seen as a new version of iTunes, which eliminates the need for Apple's 200 million iTunes users to manually transfer songs among devices by synching them with their PCs.
Users will also be able to download every song they have ever purchased to as many as 10 devices instead of five at no extra cost.
"This is the first time we have seen this in the music industry - no charge for multiple downloads for different devices," said Mr Jobs.
"Any song I buy on any device will automatically be downloaded to all my devices."
Analysts believe the iTunes feature will help drive adoption of the cloud among consumers.
"What Apple is going to do for users, especially those in the Mac ecosystem, is popularise the notion of the cloud, make it real," said Mike McGuire, senior analyst with research firm Gartner.
"The promise of the cloud is something users have been promised for the last several years - that notion of any content you buy or acquire on any device at any time," said Mr McGuire.
"Getting the music labels and publishers on side has been crucial here," he added.
Apple reportedly spent between $100-$150m (£61-£92m) to persuade the big four - Sony, EMI, Universal and Warner - on board.
Apple managed to involve the music labels while rival offerings from Google and Amazon did not.
That means users of those products have to upload their own music individually to a digital locker before being able to listen from multiple devices - a process that, depending on the size of the library, could take hours or days.
For Mr Jobs's famed "one last thing", where he normally brings out the latest shiny gadget, the Apple boss unveiled a service called iTunes Match.
It will give users access to as many as 20,000 songs online at a cost of $24.95 (£15.25) a year.
The feature will use a technology that scans a user's hard drive and automatically matches songs that they may have ripped from another source or bought elsewhere to a song in the store and it then adds them to the library.
TuneCore chief executive and founder Jeff Price told the website Mashable.com that this allowed Apple to monetise piracy.
"This puts together a model that allows people to make money off pirated music," said Mr Price.
The move surprised a number of industry watchers.
"I'm a bit baffled. Did Steve Jobs just announce complete music piracy amnesty? I think he might have," said David Gewirtz of technology website ZDNet.com.
"It's a curious, interesting, and dare I say it, elegant solution to the pirated music problem," Mr Gewirtz said.
Apple announced during the conference that it was now the world's biggest music retailer and has sold 15 billion songs on iTunes since the store opened in 2003.
The iTunes part of iCloud is available today with an iOS 4.3 update. Other iCloud features will come in the autumn.
'I love you'
Apple's keynotes are much anticipated events where the company usually takes the wraps off some new hardware that will delight the Apple faithful.
The appearance of Mr Jobs is just as big a draw, and especially at the moment given that he is on his third medical leave following a cancer diagnosis back in 2004.
He stepped on stage to rapturous applause and an audience member shouting "I love you". Mr Jobs replied: "It always helps. I appreciate it."
His first appearance lasted only a matter of minutes. While his voice sounded weaker than normal, he looked his usual thin self, dressed in his trademark garb of a black, long-sleeved top and faded denim jeans.
When Mr Jobs returned to showcase iCloud, the highlight of the keynote, his voice was much stronger and he was animated and joked with the 5,200-strong crowd of developers.
"He delivered all the key points, but it doesn't look like he is getting any better," said veteran Silicon Valley technology analyst Rob Enderle.
Ge Wang, a Stanford University assistant professor and co-founder of app company Smule was not as downbeat in his assessment.
"He sounded great and still has that twinkle in his eye."