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Updated with new stock information

CUPERTINO, Calif. --


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CEO Eric Schmidt is stepping down from


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board of directors, highlighting the increasing


between the two tech giants.

The Internet giant has recently thrown its weight behind its




operating systems, significantly altering the dynamic between the two companies. In addition to the Android smartphone OS, Google will aim its Chrome offering at the low end of the PC market when it launches in the second half of 2010.

"Unfortunately, as Google enters more and more of Apple's core businesses, with Android and now Chrome OS, Eric's effectiveness as an Apple board member will be significantly diminished, as he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest," said Apple CEO Steve Jobs in a statement released Monday. "Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple's board."

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With increasing U.S. government


of Silicon Valley, there has already been speculation that Schmidt's departure is an attempt to avoid additional attention from regulators.

Schmidt, who had been a member of Apple's board since August 2006, was


for a

senior technology role

within the Obama administration, but publicly pledged his allegiance to Google.

Earlier this year Schmidt said that he had no intention of quitting Apple's board amid an antitrust investigation involving the two companies. The CEO told a group of reporters at Google's annual shareholder meeting that he will remain an Apple board member despite the

Federal Trade Commission

's inquiry into whether ties between Google's and Apple's boards might discourage competition, according to media reports. Now, however, he has opted for a complete about turn.

Under Schmidt's stewardship, the Internet search giant blew past analysts' sales and profit estimates in its recent

second-quarter results

and noted signs of stability in the ad market. Schmidt is also itching to take on software behemoth


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with the new Chrome OS, which he recently described as a



Shares of Apple rose $2.24, or 1.4%, to $165.63 in recent trading. Google, meanwhile, was rising $8.80, or 2%, to $451.85.