From the Home screen, navigate: Settings > iCloud > Get a Free Apple ID.
The option to create a new Apple ID shows only when not logged in with an existing ID.
Using the dial, enter your birthdate then tap Next.
Enter your first and last name in the spaces provided then tap Next.
From the 'Email Address' screen, tap Use your current email address.
Enter the appropriate info (email address, password) into the required fields.
The email address entered becomes the Apple ID.
Password must be at least 8 characters, including a number and an uppercase and lowercase letter.
From the 'Security Questions' screens, tap Question, choose a question then enter an answer.
Select a question and answer for all available fields.
To continue, review the License Agreement then tap Agree (located in the lower-right).
To confirm, tap Agree.
An email with verification steps is sent to the address chosen as the Apple ID.
For additional setup info, see Change iCloud feature settings.