A BusinessWeek piece named Apple vs. Google discusses much of the recent competitive business products the two companies have. On page three of that article there are some analysts who suspect Apple may drop Google as the default iPhone search provider, in favor of Bing.
Jonathan Yarmis, research fellow with the consulting firm Ovum, was interviewed by BusinessWeek, and BusinessWeek wrote:
Some analysts believe the Apple-Google battle is likely to get much rougher in the months ahead. Ovum’s Yarmis thinks Apple may soon decide to dump Google as the default search engine on its devices, primarily to cut Google off from mobile data that could be used to improve its advertising and Android technology. Jobs might cut a deal with—gasp!—Microsoft to make Bing Apple’s engine of choice, or even launch its own search engine, Yarmis says. “I fully expect [Apple] to do something in search,” he adds. “If there’s all these advertising dollars to be won, why would it want Google on its iPhones?”
I am not sure if that will happen, but there is no doubt a conflict between Apple and Google. The biggest sign of such conflict was seen when Google’s CEO resigned from Apple’s board in mid-2009.
Will this ultimately lead to Apple building out their own search engine or dropping Google for Bing? That is unknown, but anything is possible.