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Exploring that more deeply, AllThingsD's sources paint a picture where the goals and priorities of both Apple and Google were directly in conflict.
1.) Apple powered its old iOS Maps app with Google data. Apple controlled the front end, including the branding, while Google controlled the data.
2.) Apple wanted to add voice-controlled turn-by-turn directions to its Maps app, but it needed Google's OK and data to do so. Google had spent years building up the databases that made this possible, and the company was keen on keeping voice-controlled turn-by-turn directions as a flagship feature of Android.
An unnamed source said, “There were a number of issues inflaming negotiations, but voice navigation was the biggest. Ultimately, it was a deal-breaker.”
3.) Much of that mapping data—perhaps most of that data—had been added by iOS users. iOS users represent a much larger percentage of Google's mobile mapping services than Apple's market share.
4.) As John Paczkowski wrote, "[Apple] was now in a position where an arch-rival was calling the shots on functionality important to the iOS maps feature set."
5.) Google wanted branding inside of the Apple Maps app, which Apple declined. Google also wanted more say on which features were offered in the Maps app, which was also declined. Google wanted to add in Google Latitude specifically. Guess what? Apple declined to allow it.
With this backdrop, it's easy to understand that the two companies were effectively at an impasse. Apple wanted things Google wasn't willing to offer, while Google wanted things that Apple wasn't willing to offer. The two companies are bitter rivals in the smartphone market, and with mobile mapping such an important aspect of the smartphone experience, it was only a matter of when, not if, Apple and Google would find themselves at loggerheads.
As long as Google refused to allow voice-controlled turn-by-turn directions, iOS would be at a competitive disadvantage to Android, even though iOS customers were doing the heavy lifting in building up Google's mapping data.
As long as Apple refused to allow Google a say in what features got added to iOS Maps, it wasn't getting everything out of those iOS users that it could. iOS participation in Google Latitude, for example, would be a major boost in the popularity of that Google service. The value of branding inside iOS Maps is also enormous, if hard to quantify.
In the end, there is simply too much value in mobile mapping user data for Apple to allow another company final say in what it can do, or for Google to allow its arch-rival total access to what it has spent so much to build.
The two companies had to go their own way on maps, and what's left to argue about is the timing. Many believe Apple Maps isn't ready for prime time, and it's possible that Apple should have taken the remaining year of its contract with Google to continue to build up its infrastructure before dumping Google Maps from its platform.
The reality, however, is that over time, this will be less of an issue for us, the end-user. Google and Apple going head-to-head over maps will end up giving us a better feature set and a better experience. This will be especially true if Google builds a standalone Google Maps app for iOS and Apple allows it on the App Store.
