Originally Posted by Vaelian
Except that was one of several suggestions, not exactly a demand. Apple, in the other hand, didn't make any suggestions of their own, they just denied everything Google suggested, in essence only accepting it if Google provided the service for free. That's not standing for your users' privacy or experience or anything at all, that's a purely political decision not made with users in mind. Google also suggested adding in-app branding. which apple refused, and strangely you didn't mention it. Why did you forget?
We only know what's being reported which, if accurate, would seem to be from sources inside Google.
We don't know that Apple didn't offer compensation for turn-by-turn directions, but it appears that it was Google that held out for location data which is something Apple isn't going to agree on. Every time a privacy issue crops up in the press, Apple gets skewered over it, whether justified or not. Remember the cell tower location data that Apple didn't download to their servers while Android phones did? Google Latitude has far, far worse privacy implications to simply trust Eric Schmidt's dismissive assurances.
As far as in-app branding, that was never going to happen for a core iOS function. If Intel couldn't get their "Intel Inside" stickers on Macs when Apple first switched away from the PowerPC processors, what makes you think Apple would acquiesce to having their mapping function branded by Google (of all companies)? If branding is that important to Google, they can build their own Google Maps app, though knowing Google's modus operandi I'm certain no app will get more scrutiny than that one will.
They way I'm reading this (esp. in the past few hours), Google played chicken with Apple fully believing Apple didn't have any other options, and sometimes when you gamble you lose. The amazing thing to me is the amount of hubris on Google's part to believe they could back Apple into a corner (ASUS style) and get whatever they wanted.