Before Apple came up with iCloud it looks like they actually made a run at Dropbox. Dropbox made its success by offering consumers storage in the cloud and making it very easy. New users could sign up and receive free storage space and if they want more, pay for it. Dropbox worked by designating a folder on your local computer to sync files to the cloud which could then be also synced between all computers you own.
Forbes has confirmed that Apple was indeed looking at the service and actually considered purchasing it. Steve Jobs met with co-founders Drew Houston and Arash Ferdowsi on Apple’s Cupertino campus and pitched a deal to them. The deal was quickly nixed and Jobs “told them he was going after their market.” Dropbox now has 50 million users with some 96% using the service free and the company is still making a $240 million profit annually. So, they aren’t doing bad.
So iCloud emerged, is it competition for Dropbox? Who knows? I definitely think that both services are different and I will tell you why. iCloud to me just seems like a service that only works well between my iOS devices, you may disagree with that though. Dropbox works very well in the desktop space and marginally in the mobile space. I use Dropbox almost daily to move files between remote computers and sync files with friends which is something iCloud has not yet provided for me yet. It is possible that iCloud may evolve in the future and be more comparable to Dropbox, but for now I think they are completely separate and different services.