The more this story develops the more it seems like watercooler gossip that has spilled into the blogosphere. As much as they may have opposing products Apple and Google still rely on each other a lot which makes an open war between execs seem unlikely
Also, I'm thinking some of this Microsoftian 'us against the world' mentality could be from ex-Microsoft employees which have moved to Google and Apple as managers. From the outside, it seems like the combative teams, at least at Google, are either based in Seattle, or had ex-Microsoft employees in them (Android).
I wouldn't be at all surprised if the Android team wanted to destroy iPhone, it's definitely the haves and the have nots (I mean, people use and like Android phones (myself included), but the iPhone is and always has been something of a phenomenon). However, I don't think the Android team (having been absorbed in an acquisition) is necessarily representative of all of Google. The only point of data I have there is their receptiveness to outside contributors (the 'we're students looking to contribute' email got 10 response on chromium-dev and didn't even make it past the android-kernel-dev moderators).
I think Google's interest in android is more along the lines of ensuring that there is an open internet-enabled phone for regular people. I'd guess that Google makes more money off of iphone users use of its services than it does off of anything Android related at all.
I'm totally for the war. I'm elated that the engineers aren't involved because if they were, then the war would be a completely different situation, but they aren't. That said: If this war really takes on momentum, then (assuming one side doesn't just win [Lawsuits take a while]) each side will try to out build the other with new technology. Has anyone seen the new Nexus One commercials (on hulu for me)? Google is finally advertising the capabilities of its new phone.
What's the best part? The engineers won't be pressured to give a hoot, but I admit it may seem a bit stressful.
Apparently Apple higher-ups are really pissed at (parts of) Google, Android mainly, but Google higher-ups are really pissed at all of Apple ("managers are talking about waging war").
Two possibilities I see are: either Apple is unaware that the whole of Google are conspiring against them, or this is entirely on Apple's side. It's possible that Gruber's Google sources are all within the Android team but surely he would have pieced that together on his own?
http://gizmodo.com/5503004/steve-jobs-and-eric-schmidt-spott...