Apple, Google Connect on iPhone

Updated from 6:26 a.m. EDT

The march toward Apple's (AAPL Quote) iPhone launch has sparked widespread buzz, but the bigger development may be how the device is bringing together two titans of tech.

Beginning with the iPhone, Apple and Internet search leader Google (GOOG Quote) are set to cross paths in more than one way as the companies stake their claim in the growing mobile market for communications, entertainment and Internet browsing.

Apple has already intimated that its new phone, selling at $500 for the base model, will come loaded with Google's search and mapping applications. And last week, Apple Chief Executive Steve Jobs announced that videos from Google's YouTube can be streamed wirelessly from computers to Apple TV set-top boxes for viewing on televisions.

The collaboration foreshadows a deeper partnership that extends into video distribution and advertising on mobile devices.

"Apple already has a big lead in the portable music market, and the next big thing is portable video," says Richard Parower, portfolio manager at J. & W. Seligman. Seligman owns both Google and Apple shares.

Apple could gain a similar advantage in mobile video by working with Google to give users of its iTunes online music store easy access to YouTube's trove of video clips. That would be the first step in replicating the success that Apple had with digital music.

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