Then-Apple CEO Steve Jobs delivers the keynote address at the 2011 Apple World Wide Developers Conference at the Moscone Center in June in San Francisco. (Justin Sullivan/GETTY IMAGES)

But not so, reported All Things Digital’s Peter Kafka, who said that the apparent streaming was really a preview playing while the track downloaded into a local cache on the device. In other words, it wasn’t streaming in the traditional sense— that is, playing while buffering and using a constant connection.

Instead, the track is taken from the cloud, while a full preview is stored on your iDevice, letting you skip ahead, go back and replay at will. The track isn’t added to your device’s music library. And while a song you listen to but don’t download can be replayed while your device is offline, it will disappear if you try to switch to a different track without reconnecting to the Internet.

Bottom line, iTunes in the Cloud does appear to let users listen to their music without downloading files into their libraries. It’s essentially the same experience as traditional streaming — if not a little bit better, because it doesn’t rely on a stable internet connection to play through a track.

The drawback to this approach, Kafka said in an update to his report, is that it’s not yet known how big the cache that keeps the previews is, or how often it gets cleared — reports from developers using the Match beta have said that performance thus far has been a little erratic.

As an interesting side note, Kafka also reported that a music executive told him Apple has already locked up traditional streaming rights for iTunes, but doesn’t think telecom networks will be able to handle that much on-demand, buffering music.

In this video, Flaminio breaks down the discussion step-by-step:

Do you think this shows streaming? And, at the end of the day, does it matter to you? What features do you hope to see as more details about iTunes in the Cloud emerge?

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