How the battle between Apple and Google will shape the future of mobile computing

When companies start to imitate one another, it's usually either an extreme case of flattery -- or war. In the case of Google and Apple, it's both.

Separated by a mere 10 miles in Silicon Valley, the two have been on famously good terms for almost a decade. Now the companies have entered a new, more adversarial phase. With Nexus One, Google, which had been content to power multiple phonemakers' devices with Android, enters the hardware game, becoming a direct threat to the iPhone. With its Quattro purchase, Apple aims to create completely new kinds of mobile ads, say three sources familiar with Apple's thinking. The goal isn't so much to compete with Google in search as to make search on mobile phones obsolete.

"Apple and Google both want more," says Chris Cunningham, founder of the New York mobile advertising firm Appssavvy. "They're gearing up for the ultimate fight."