The competition between Apple and Google is heating up. Apple has acquired Quattro Wireless for a purchase price of $275 million and they would now be building their own mobile advertising business for the iPhone and Apple tablet. This is a direct challenge Google’s mobile advertising business. On the other hand, Google has just launched its own Nexus One phone to much fanfare (and some might say typical Google hubris) and also opened its own new mobile store initiative.

In November Google acquired AdMob thus giving the pinch to Apple in the field of mobile advertising. This $750 million investment by Google is aimed at building up its a mobile advertising franchise on a large scale. Additionally Google’s Android platform is proving itself to be the most threatening competition for Apple’s hugely successful iPhone product line.

One reason for this is the potent software package that is Android. But another major aspect is that Google has decided to distribute Android freely to any mobile phone vendor. This strategy has consequences for all mobile carries such as Verison, Motorola, LG, Sony and Ericsson.

Apple is planning to announce the launch of its tablet computer in this month. Not so coincidentally Google’s Android would also be used as an operating system platform for tablet computers. Both Google and Apple want to convince game and application developers to invest their time and efforts in their own mobile platforms to increase the usability and options available for their users.

But in this area Apple has the upper hand. The strategy of both the companies is different. Google has adopted a policy of “openness” and free distribution, whereas Apple is following their corporate philosophy of very restricted and proprietary technological development. This conflict of strategies has fueled the cold war between the two tech giants, and is taking the shape of a direct head-on fight as Apple has fired a opening sdalvo by keeping two Google apps off its iPhone – Google’s Voice Phone Service and Latitude social networking service. This recent battle between the two companies led to the initiation of FCC investigation making the relationships between the two turning bitter.

Google is also adding fuel to the firefight with the launch of by Google of OS X via Chrome OS, a lightweight operating system for Web-focused computers. Additionally, Google is rumored to announce the Video rental service, which would directly compete with Apple’s cash cow iTunes. Another front in the war is the arena of e-mail. Gmail is Google well known e-mail service. But for just $100 a year, Apple’s MobileMe offers free unlimited e-mails and Web hosting space and calendar syncing, and more. Whereas Google’s Gmail, Google’s Calendar and Picasa are available free of cost to its users MobileMe offers smooth integration with Apple’s large iPhone userbase.

Google hopes consumers will opt for its Android Phone platform, which tightly integrates with Google’s Gmail and Calendar services and will feed their advertising revues. These skirmishes are soon going to develop into a battle royale between the two giants of Silicon Valley, and when they start competing in many other areas in the who is going to benefit from the fight? The consumer, of course.

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