The chief executive of Google today resigned from the board of Apple amid concerns the search engine giant is now a direct competitor to the iPod manufacturer.
Eric Schmidt's exit from the company was described by Apple chief executive Steve Jobs as a mutual decision.
Last month, Google confirmed it will launch its own operating system for personal computers, Chrome OS, which is a potential rival to Apple’s Mac systems. Also, Google’s Android operating system is used in mobile devices that compete with Apple’s iPhone.
It has also emerged that on Friday, the Federal Communications Commission sent letters to Apple, Google and AT&T, Apple's iPhone partner in the US, to gather more information on why Apple had rejected Google Voice’s application for the iPhone.
Mr Jobs said today: "Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric's effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest.
“Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board." Mr Schmidt had been on Apple’s board since August 2006.
The decision marks an about-face for Mr Schmidt who had previously suggested, in May, that a Federal Trade Commission inquiry into his role on Apple's board would be unlikely to find any evidence that the ties between the two companies might give rise to competition issues.
At the time he said he hadn’t considered stepping down as an Apple director because he doesn’t view the company as a “primary competitor�.