Google with its recent launch of Nexus One shows, how competitive the smartphone market has become. The Nexus One competes directly with the iPhone and its wireless handset operating system rivals the iPhone OS.
On the backdrop of increasing rivalry with Google, Apple has started discussion with Microsoft for making Bing as the default search engine on the iPhone’s Safari Web browser. BusinessWeek reported that, the two companies had been negotiating for weeks over a possible partnership on the iPhone.
Google Being the default search engine on the iPhone carries the financial benefits from Ads revenue. Closure of this deal between Apple and Microsoft may mean that iPhone owners would automatically get Microsoft's Bing as the main search engine leading to a loss in Google's market share and would also help Bing gain market share in the quickly growing area of mobile search.
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