Apple headed to the iCloud for iOS 5?

More rumors have come to light about Apple and the iCloud brand, including DigitalDaily's sources confirming the name acquisition and AppleInsider hearing that it's already being used internally for iOS 5 (and Mac OS X Lion).

According to people familiar with the matter, Apple is prepping beta versions of both iOS 5.0 and Mac OS X Lion ahead of its annual developers conference that integrate with a service dubbed "iCloud," enabling users to sync and store much of the same information they currently can with the company's existing MobileMe service, such as bookmarks, email, contacts and iCal events.

Regarding the name, Apple looked to be securing [] last year before ultimately announcing iPad, so as always we'll only know for sure when Apple announces it. The service itself remains a mystery as well.

Would it subsume MobileMe? Would it include media? There have been strings found for a social-esque photo/media stream service, and rumors persist that Apple is entering the streaming music/digital locker space as well. Would you be able to store anything there, like Amazon Cloud Drive, DropBox, or Google Docs? Or would Apple restrict it to iTunes-purchased content only in order to appease the record labels and movie industry?

If it merely allowed media re-downloads the way the App Store allows app re-downloads it would be a good first step. Streaming would be a better one. Subscription would be the end-game.

For sync, allowing apps (especially games) to persist state across iOS (and potentially Mac) would be huge. The above-mentioned media/photo sync/sharing as well. And iDisk has demanded a Dropbox-style rejuvenation for years. Likewise, mirroring the Mac's ability to backup and sync down Settings from the cloud could pave the way to iTunes tether-free device activation.

So what would all that, or any functional subset of that cost? AppleInsider thinks it could be free and used as a loss-leader to drive further iPhone, iPod touch, iPad, and Mac sales. While Apple has done "just above break-even" businesses before, like iTunes and the App Store, it's hard to see them doing anything for "free". Perhaps, like Find My iPhone for MobileMe recently, there will be a base of free services and a set of paid, premium services on top of them (the Google or DropBox model).

If the free tier included iTunes media re-downloads and basic Settings sync, that could be compelling enough for most users. But what then would the premium version require to convert them to paying customers?

[AppleInsider, Digital Daily and TechCrunch]