Apple is reportedly in negotiations with Microsoft to replace the default search engine in mobile Safari on the iPhone with Bing. Those negotiations may even result in Bing being added as one of the search engine options for the desktop version of Safari, according to a report by BusinessWeek. Google is the current default on both platforms—and would likely remain a user option—though increasing contention between Apple and Google may be the reason behind a possible switch.

Apple and Google have long been collaborators and partners, with Google CEO Eric Schmidt sitting on Apple's board of directors until recently. Schmidt gave up his position amid an FTC investigation and increasing competition between the two companies. "Apple and Google know the other is their primary enemy," one anonymous source said.

In addition to competing in mobile smartphone platforms and cloud services, Google plans to launch its own operating system, dubbed "Chrome OS" for its heavy reliance on Web-based applications. Meanwhile, Apple has acquired its own mapping software company and a mobile advertising firm. Apple also acquired music streaming service Lala, which shortly before the acquisition had inked a deal to provide content for Google's new music search results.

Furthermore, both Google and Apple have been at odds recently over questionable rejections of Google's iPhone apps. Apple rejected a native version of Google Latitude on the grounds that users might "confuse" Latitude with the native Maps application, forcing Google to release a Web-based version. That news was followed days later with word that Apple rejected a native version of Google Voice, again citing possible user confusion with the native phone dialer. Apple also removed all previous Google Voice clients from the App Store, sparking an FCC investigation.

Frenemies?

Though Apple and Microsoft have also dealt with their fair share of bitter rivalry—plenty of Apple's "Get a Mac" ads poke fun at Windows—they also have a history of collaboration.

Microsoft provided a BASIC runtime for Apple II computers, and Microsoft first launched Excel on the original Mac OS. When Steve Jobs returned to Apple in 1997, he worked a deal with Microsoft to invest in Apple and continue making Mac versions of Microsoft Office in exchange for making Internet Explorer the default browser on shipping Macs. Eventually Microsoft divested its interest in Apple, and IE for Mac was supplanted by Safari. Yet, to this day, Microsoft's Mac Business Unit continues to produce Office and other Mac software.

Microsoft has often been seen as Apple's enemy, though that wouldn't preclude a search deal with the company.

"If you have to do a deal with the devil, you might as well deal with the devil that needs you most," Forrester Research analyst James McQuivey told BusinessWeek. A deal to make Bing the default search engine could mean a big boost to Bing's overall penetration—Google now accounts for about 86 percent of mobile searches versus Bing's 11 percent.

CNBC reports that the Bing iPhone app is already driving a much higher volume of mobile searches than the $500 million deal to make Bing the default search on all Verizon Wireless handsets. And Microsoft may be willing to pay Apple a handsome sum to supplant Google as the default, which could drive more search ad revenue Microsoft's way.

However, Oppenheimer analyst Yair Reiner isn't convinced ditching Google for Microsoft is necessarily the best course of action. "Cozying up to Microsoft could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," Reiner wrote in a note to investors.

Still, even if Apple and Microsoft are able to strike a Bing-on-iPhone deal, Apple may have its own search solution up its sleeve. A source for BusinessWeek said that Apple has a "skunk works" to build its own search, and that a deal for Bing is merely "buying itself time."

While Apple relied heavily on Google for features of the iPhone when it first launched, including browser search, Maps, and YouTube, it recognizes that mobile advertising—heavily connected to search—will play a key role in the future of mobile platforms. "Apple isn't going to outsource the future," the source said.