Apple has unveiled a music streaming service called iTunes Radio and new mobile software, in the biggest redesign of its operating system since the original iPhone debuted in 2007.

Apple's iTunes Radio, announced at its annual developers' conference in San Francisco, comes free, supported by ads across many devices including iPhones, iPads and the Apple TV.

Much like rival services such as Google’s All Access, iTunes Radio allows listeners to customise 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.

Meanwhile the company unveiled the next version of its mobile software, iOS 7, which sports a streamlined and overhauled design, including an edge-to-edge look that uses translucency to highlight underlying content, new typefaces, and new icons.

Apple plans to release iOS 7 in the autumn.

The overhaul of the iOS platform is the result of a recent company reorganisation, which gave Jonathan Ive - the hardware designer responsible for many of Apple's iconic devices - control over software for the first time.

"It's the biggest change to iOS since the iPhone," said Chief Executive Tim Cook.

Also at the developer event, Apple executives showed off a new line of Macbook Air computers and gave a sneak peek at a the next version of its top-of-the-line computer, the Mac Pro.

In a rare preview of upcoming hardware, marketing chief Phil Schiller showed the sleek cylindrical chassis of the computer 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, Mr Schiller said.

"Can't innovate any more, my ass," Mr Schiller said as he showed off the new Mac Pro. "This is a machine unlike anything we've ever made."

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.

It will feature a number of updates, including better support for multiple screens and new file management tools.

And, in a continuation of efforts 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'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.

Among some of the other features introduced was "activation lock," an anti-theft security enhancement that prevents unauthorised resetting of the device.

The conference, whose tickets sold out in just over a minute after they went on sale in April, comes as Samsung solidified its lead in the smartphone market in the first quarter with a 33% share followed by Apple with 18%, according to market research firm IDC.

Mr Cook is under pressure to show that the company that kick-started the smartphone and tablet markets is not slowing as deep-pocketed competitors like Samsung and Google encroach on its market.

Investor concerns centre 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.

Apple's stock has fallen 37% 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 co-founder and former CEO Steve Jobs in 2011.