By Poornima Gupta and Edwin Chan
SAN FRANCISCO (Reuters) - Apple Inc unveiled a music streaming service called iTunes Radio and new mobile software on Monday, in the biggest redesign of its operating system since the original iPhone was introduced in 2007.
The new software, designated iOS 7 and announced at Apple's annual developers' conference in San Francisco, sports a streamlined design, employs translucency and a fresh palette of colors, and features animation in apps.
Apple's iTunes Radio, one of the more highly anticipated features of the new iOS 7, comes free, supported by ads across many devices including iPhones, iPads and the Apple TV.
Much like rival Pandora Media Inc's Internet radio, the service - which launches in the fall, months after Google Inc's "All Access" on-demand competitor debuted - allows listeners to customize their own radio stations by genre, skip songs multiple times, or just tune in to some 200 featured stations.
Apple has been talking to record companies for the past year in hopes of getting the service off the ground, seen as crucial to retaining users as music consumption grows alongside smartphone use. It will also come free of ads for customers who subscribe to Match, another Apple music service.
Executives also showed off a new line of Macbook Air computers. They gave a sneak peek at a cylindrical Mac Pro desktop, in a rare preview of upcoming hardware. And, in a continuation of efforts over the past year to wean itself off arch-rival Google's services such as maps, Apple's updated Siri voice software on the iPhone will turn to Microsoft Corp's less-popular Bing as its default in-app search engine.
Previously, Siri handled Web search queries by asking users if they would like to access Google, which dominates Internet searches. With iOS 7 however, users can still choose to ask specifically for Google results.
The latest Macs will run a new computer operating system christened OSX Mavericks - named after a famous California surfing spot and a departure from Apple's penchant for naming software after big cats like Mountain Lion.
The real makeover was reserved for iOS 7, a smartphone and tablet platform overhauled by resident creative honcho, Jonathan Ive. It comes with a new edge-to-edge look that uses translucency to highlight underlying content, new typefaces, and new icons. Apple plans to release iOS 7 in the fall.
It will support multitasking for all apps.
"It's the biggest change to iOS since the iPhone," said Chief Executive Tim Cook.
Robert Brunner, founder of design consultancy Ammunition and a former design head at Apple, said it was past time Apple changed the look of software that had become "busier and busier" visually and, to some degree, busier and busier functionally.
"The iOS look and feel had become long in the tooth," said Brunner, who hired Ive while he was at Apple. "So what Jony has done is really gone in and cleaned it up. He made it feel more sophisticated, more modern."
"It seems like quite a lot to have done in a relatively short period of time," said Brunner, who uses an iPhone.
The conference, whose tickets sold out in just over a minute after they went on sale in April, comes as Samsung Electronics Co Ltd solidified its lead in the smartphone market in the first quarter with a 33 percent share followed by Apple with 18 percent, according to market research firm IDC.
Cook is under pressure to show that the company that created the smartphone and tablet markets is not slowing as deep-pocketed competitors like Samsung and Google encroach on its market.
Investor concerns center on whether Apple will be able to come up with more groundbreaking products as the smartphone and tablet markets get more crowded. In April, Apple reported its first quarterly profit decline in more than a decade.
Marketing chief Phil Schiller offered the audience a sneak peek at Apple's upcoming new Mac Pro, its top-of-the-line computer. The computer has a sleek cylindrical chassis that he said will feature several times the processing and memory speed and power of the previous generation.
It will be released later this year and be assembled in the United States, Schiller said.
"Can't innovate any more, my ass," Schiller said as he showed off the new Mac Pro. "This is a machine unlike anything we've ever made."
Apple's stock has fallen 37 percent after touching a high of $705 in September as competition in the smartphone market escalated. Some investors believe the company is struggling to come up with original new products since the death of cofounder and former CEO Steve Jobs in 2011.
The redesigned iOS comes after Cook ousted former chief mobile software architect and 15-year Apple veteran Scott Forstall last November, in a sweeping management move that also gave Ive more control of the look-and-feel of both hardware and software.
Some industry experts have criticized Apple's mobile operating software, which has retained its general look and feel since its inception, for looking somewhat dated.
"The iPhone was the first real smartphone for a lot of people so it had to be really basic," said Phil Libin, CEO of Evernote, which makes note-taking software for smartphones. "Now the training-wheels are starting to come off a little bit."
Among some of the other features introduced was "activation lock," an anti-theft security enhancement that prevents unauthorized resetting of the device.
Cook told the audience of developers that Apple's App Store now has 900,000 apps that have been downloaded a total of 50 billion times.
Apple's stock dipped 0.66 percent to close at $438.89 on the Nasdaq.
(Additional reporting and writing by Noel Randewich, Editing by Andre Grenon, Richard Chang, Steve Orlofsky and Matt Driskill)