How to Create a iOS Style Background Blur in Photoshop

Step by step,

1) Prepare your image which is going to have blur effect.

2) Convert the image to Smart Object.

3) Create any shape that is going to have covered with blur effect into the image.
(** Shape color : white)
4) So far, you got 2 layers including the image and the shape. Then, duplicate both of the layers.

5) Select newly duplicated shape layer and give it "fill:50%"

6) Click the topmost image layer(duplicated image) and create clipping mask after clicking right button of your mouse.

7) Click the duplicated image and apply Gaussian Blur effect (I gave it 25 pixels for radius but it depends on the resolution of the document)

8) Click two image layers and link layers after clicking right button of your mouse.


Reference
http://medialoot.com/blog/how-to-create-a-dynamic-ios-7-style-background-blur-in-photoshop/