MacRumors

Apple's annual Worldwide Developers Conference (WWDC) kicks off today at the Moscone West convention center in San Francisco, with the event headlined by the traditional keynote address beginning at 10:00 AM Pacific Time / 1:00 PM Eastern Time.

In line with tradition, Apple is expected to provide the first looks at iOS 9 and OS X 10.11, with the company also announcing a fresh push into streaming music led by a new Apple Music subscription service and a revamped iTunes Radio. Apple is also expected to debut new tools allowing developers to build native Apple Watch apps and perhaps make some additional announcements related to Apple Pay and HomeKit.

Apple is providing a live video stream on its website and via Apple TV.

In addition to Apple's video stream, we will be updating this article with live blog coverage and issuing Twitter updates through our @MacRumorsLive account as the keynote unfolds. Separate news stories regarding the event announcements will go out through our @MacRumors account.

Full Keynote Transcript Below in Reverse Chronological Order

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Apple is building a high-speed content delivery network and plans to upgrade its data centers with more of its own equipment in an effort to better compete with Amazon, Google, Microsoft and other cloud service providers, according to Bloomberg. The improved infrastructure will enable Apple to provide faster delivery of cloud-based content and services such as iCloud, iTunes and Siri.

The high-speed network may be a prerequisite for Apple's much-rumored streaming music and TV services, the first of which is expected to be announced at Apple's annual Worldwide Developers Conference today in San Francisco. Efficient content delivery will be important for both services, especially if the company plans to fulfill its ambitious goal of signing up 100 million subscribers for Apple Music.

The foundation of Apple's high-speed data network will reportedly be long-haul pipes connecting the company's data centers in California, Nevada, North Carolina and Oregon. Apple has also been planning ways to send data via fiber lines at hundreds of gigabits per second, as opposed to solely using off-the-shelf technology rented from third-party vendors, according to the report.

“Apple wants to own pipes linking its four large U.S. data centers and Internet hubs in certain cities to ensure fast, reliable delivery of content and services. By adding capacity and increasing efficiency, it seeks to handle more traffic on its own, without renting as much server space from cloud providers such as Amazon and Microsoft, said people with knowledge of the plan, who asked not to be identified because Apple isn’t discussing the moves publicly. They declined to name the cities involved.”

Apple will not move away from using Hewlett-Packard servers, Cisco ethernet switches and other off-the-shelf technology entirely, but the iPhone maker has been in talks with companies that could help design its own equipment that would be produced by third-party manufacturers. The new gear would mainly be used in Apple's future data centers in Arizona, Ireland, Denmark and elsewhere.

Apple was the seventh-largest cloud infrastructure spender in 2014, investing $1 billion towards its data centers around the world last year according to research firm Analysys, matching the billions of dollars spent by Amazon, Google, Microsoft and other rivals in the cloud storage and services race. iCloud was introduced in October 2011 and is available on Mac, iPad, iPhone and other Apple products.

Apple has an ambitious goal to sign up 100 million subscribers for its upcoming streaming music service known as Apple Music, according to The Associated Press. A subscriber base that large would trump competing services such as Spotify, Pandora, Deezer and others, which had a collective 41 million paid U.S. subscribers in 2014 per the International Federation of the Phonographic Industry.

Apple Music is widely expected to be a rebranded and improved version of Beats Music, which the Cupertino-based company acquired for $3 billion last year alongside the Beats Electronics headphones and speakers division. The much-rumored streaming service will reportedly cost $10 per month, with a three-month free trial period, and focus on exclusive content and human curated playlists.

Beats Music had 303,000 U.S. subscribers as of December, trailing market leader Spotify's 4.7 million U.S. subscribers by a significant margin. Nevertheless, Apple previously said it has over 800 million users with iTunes accounts to its advantage and will reportedly present those users with the option to purchase an Apple Music subscription instead when downloading songs and albums through the iTunes Store.

Apple is expected to unveil its new streaming music service at its annual Worldwide Developers Conference today in San Francisco. During the opening keynote at 10 AM Pacific, CEO Tim Cook and other executives should reveal several details about the service alongside other announcements about iOS 9, OS X 10.11, Apple Pay and more. MacRumors will be providing live coverage of the event as it unfolds.

During an on-stage interview at the Midem Music Industry Festival in Cannes today, Sony Music CEO Doug Morris confirmed Apple will indeed be introducing its "Apple Music" streaming service at its Worldwide Developers Conference keynote tomorrow, according to VentureBeat. While numerous sources have indicated the service will be unveiled at WWDC, Morris' confirmation is notable as coming from a close friend of Apple's Jimmy Iovine and one of the parties involved in the negotiations for launching the service.

“It’s happening tomorrow,” Morris said during an interview at Midem in Cannes that primarily focused on his storied career in the music industry.

A highlight of that career was a 37-year partnership with iconic producer Jimmy Iovine, who now is running Apple’s music services after the company paid $3 billion to acquire Beats. Underscoring Iovine’s role in the music industry, Morris said he still talks to him twice every day by phone. Morris said the move by Apple to bring in Iovine was a brilliant one.

Morris didn't reveal any other details about Apple Music, which is expected to be priced at $10 per month with a generous three-month free trial period and be accompanied by a revamped iTunes Radio service, but he expressed his view that Apple's entry into the paid subscription streaming market will be a "tipping point" for moving the industry from downloads to streaming.

Update Apple's Chief of French content for Apple TV has shared a photo on Instagram apparently showing he has added Apple Music to his responsibilities.

Apple is planning to alter its pricing formula for subscriptions in a major change that will benefit subscription-based apps and services like Netflix, Spotify, Hulu, and more, reports Financial Times. Apple is said to be considering changing the 30 percent fee that it currently charges and is discussing new commercial terms with media companies.

At the current point in time, all apps and in-app subscriptions work on a 30/70 split. Apple gets 30 percent of what's paid for an app or service, while the company or developer offering the app gets a 70 percent cut. That means when someone purchases Netflix through the Netflix iOS app, Apple gets over $2 of the fee paid. At the same time, Apple has disallowed direct links to outside subscription sign up services within apps, ensuring it gets its fee.

Apple's 30 percent subscription cut has been a sticking point for many companies, especially those with tight margins like music services, and it's gotten Apple into hot water in the past, most notably during the e-book price fixing case levied against it by the U.S. Department of Justice.

According to the Financial Times, changing the App Store subscription terms could make Apple devices more appealing to content creators while also lessening potential pressure from regulators.

Changing the App Store's terms of trade could improve the economics of online content businesses and reassure regulators that the company is not abusing its position as gatekeeper to one of the world's most lucrative digital marketplaces.

On the Apple TV, Apple is already offering a more generous split, taking just 15 percent of revenue generated from subscription services like the recently released HBO Now.

There are no specifics on the terms that Apple is potentially considering for companies that offer subscription services, but it appears that the price cuts at this time will not extend to standalone apps.

Ahead of the introduction of Apple's new streaming music platform, Financial Times has shared some key details about the service, confirming it will be called simply "Apple Music." With the launch of the service, Apple will be largely abandoning its iTunes branding, using the name only for the online store.

As has been previously shared, Apple will not be offering a freemium ad-supported listening tier like Spotify, and will charge $9.99 per month for the service. Apple plans to draw customers in by offering a three-month free trial, much longer than the 30 days competing services offer.

Apple's new music service is built upon Beats Music, its existing subscription service that it acquired last year. Apple executives heavily lauded Beats Music's emphasis on human curation and customization, with many of the features in Beats Music remaining in the new streaming service. For example, the new music service will continue to ask users to select favorite musical genres and styles, and paired with recommendations from artists, Apple hopes to help listeners discover songs.

Apple's iTunes Radio is also being revamped and potentially renamed, as it is being positioned as a free companion service to Apple's streaming music offering. We have previously heard that Apple's new version of iTunes Radio will be aimed primarily at users who are not in the United States, serving as a gateway service to entice people to pay for music.

Apple plans to use well-known DJs and celebrities to present music on its new radio service, and has hired several BBC Radio DJs like Zane Lowe to market the service in Europe.

Some of the celebrities who were photographed wearing Apple Watches ahead of its launch earlier this year, such as rapper Drake, will soon be acting as DJs on Apple's new radio service, which will emphasise the personal tastes of artists over using algorithms to curate music, as Pandora does.

Apple plans to unveil its new music service at its WWDC keynote, taking place on Monday. The new streaming service and the new radio service will both be built into the revamped Music app introduced in iOS 8.4.

Despite Apple dubbing 2015 "the year of Apple Pay" in its January earnings call, a number of big-name retailers remain skeptical over the contactless payments service, according to Reuters. The service launched last October in the U.S. and has steadily gained support from numerous banks and retailers in the months since.

Working through the National Retail Federation's top 100 United States merchants, of which Apple said "about half" would begin to accept Apple Pay this year, Reuters found the company's predictions may be "too optimistic," with many retailers remaining skeptical about Apple Pay.

Since then, the company has aggressively courted retailers - and claimed significant success. "We've spoken to all of the top 100 merchants in the U.S., and about half will accept Apple Pay this year, with many more the following year," a company spokesperson recently told Reuters.

After questioning and interviewing a total of 98 of the top 100 NRF merchants, it was discovered that fewer than a quarter of the retailers currently accept Apple Pay while nearly two-thirds of the companies confirmed they would not be supporting the mobile payments service this year. Just four retailers confirmed to Reuters that they would in fact be joining the support of Apple Pay in 2015.

Apple has still made significant progress since the service's debut last October, increasing retail acceptance to over 700,000 points of sale as of the last financial Apple Pay update in March. According to one retailer not accepting Apple Pay, the Cupertino-based company comes on strong when pitching to possible partners.

Interviews with retailers suggest that the company has relied on aggressive marketing to recruit participants. "They have been pushing hard and it's been that way for months," said the representative of one large retailer that has no plans to accept Apple Pay. "They have called and tried to persuade us even after we communicated our decision to them." The company hasn't adopted Apple Pay, he said, because not even a "small percentage" of its customers have asked for it.

When searching for a reason why so many companies were against backing the service, "insufficient customer demand" was the biggest reason cited by merchants. This was followed by lack of data access granted through observing customer buying habits, cost of installation, and support of other contactless payments solutions like Current-C. Twenty-eight total retailers noted that lack of data access, and the inability to send customized advertisements to individual users like traditional credit cards allow, is a "key reason" they won't accept Apple Pay.

Despite questions about the future of Apple Pay, its current partners echo enthusiasm in customer satisfaction and ease-of-use with Apple Pay. Whole Foods spokesperson Michael Silverman told Reuters that Apple's mobile wallet accounted for 2 percent of its sales dollars as of March, with an expected increase in the future. "Our shoppers are really enjoying the speed, convenience and security of Apple Pay," Silverman said. With WWDC around the corner, and rumors of much-requested features such as a rewards program coming to the platform, its likely additional companies will come around to Apple Pay as Apple beefs up the still fairly nascent service and consumer traction continues to improve.

Update 11:19 AM: Apple has provided a statement to iMore standing by its predictions of Apple Pay adoption for this year with some additional context not shared in the Reuters report.

"Customers love Apple Pay and we are very happy with the progress of our rollout since launching just six months ago," an Apple spokesperson reiterated to iMore. "We've spoken to all of the top 100 merchants in the U.S. and about half will accept Apple Pay this year, with many more the following year. There's tremendous momentum from not only large retailers but also Main street merchants, with payment service providers telling us they're seeing unprecedented demand from small and medium businesses nationwide."

Apple overnight removed the option to purchase a new iPhone on a two-year contract with AT&T on the Apple Online Store, eliminating the ability for customers to purchase an iPhone for a subsidized price of $199 or $299 through the carrier. Apple now sells iPhones on AT&T exclusively through the AT&T Next carrier financing program, while two-year contracts remain available through Verizon and Sprint.

AT&T Next allows a customer to purchase a new iPhone for $0 down and make equal payments for 12, 18 or 24 months until the full price of the smartphone has been paid, at which point the device can be traded in for a new iPhone. The full price breakdown for each iPhone model on AT&T Next, available through both the Apple Online Store and Apple Retail Store, is listed below.

iPhone 6
- 16GB: From $21.64/month
- 64GB: From $24.97/month
- 128GB: From $28.30/month

iPhone 6 Plus
- 16GB: From $24.97/month
- 64GB: From $28.30/month
- 128GB: From $31.64/month

The shift away from two-year contracts is not specific to Apple or iPhone, but rather part of a larger move by AT&T. Droid-Life reported last month that AT&T would begin moving away from two-year contracts on June 1, although the report claims that the option will remain available through AT&T's website, company-owned retail stores, local dealers via direct fulfillment and customer service.

Days before Apple is expected to announce its rebranded and revamped version of Beats Music at WWDC, the Cupertino company is still negotiating terms with music labels, reports Bloomberg. Last month, it was also reported that the two sides had not reached a deal.

The labels are pushing to get a larger chunk of revenue than they receive under their current deals with Spotify Ltd., a competing streaming service, people familiar with the negotiations said. Both sides want to complete a deal before Apple’s June 8 annual event in San Francisco for more than 5,000 developers, according to the people, who asked not to be named because the talks are continuing.

Currently, labels receive 55% of Spotify's $9.99 monthly rate while publishers take 15%. Music labels are hoping to take closer to 60% from Apple, according to the report. Previously, rumors have suggested that Apple was seeking an agreement that allow it to offer a streaming music service to customers for $7.99 a month rather than the standard $9.99 rate. However, Apple was forced to back down after record labels resisted the change.

Additionally, Apple has allegedly been urging music labels to cease offering licenses for freemium tiers that Spotify and other music services offer as the Cupertino company does not plan to offer a free tier with its new streaming service. These efforts have earned Apple scrutiny from government organizations like the European Commission and U.S. Department of Justice, as the two groups are said to be looking into Apple's negotiations.

It's likely Apple still plans to unveil its new streaming service at WWDC, as the two sides want to complete a deal before June 8's keynote address. The new Music app is said to include the rebranded streaming service, a revamped version of iTunes Radio and traditional downloaded music. Apple also plans to offer exclusive content, like behind-the-scenes video from recording sessions. Artists will also get their own pages where they can host videos, songs and other content for free as part of a program called Apple Connect, with Apple compensating the artists and labels for songs they give away.