Your iOS device will hold thumbnails. When you select an image it is downloaded from the cloud. There is an option to do this on your Mac too, but you can also choose to keep a full copy of all images in the Mac.
Yesterday I searched Google for a local funeral home. Two minutes later I did a search for a photograph. Google results came only from images of dead people from obituary websites. All I did was put in a name. Google, no one likes to FEEL watched. It was eerie and uncomfortable.
Are these your first impressions upon reading and regurgitating the press release, or reading and regurgitating the Apple.com website? Seriously, hardly a one actual unscripted impression? Crappy journalism. I expected and was actually counting on more.