IIRC it had to do with the fact that Eric Schmidt was on Apple's board of directors. Generally you don't want your competitors on your board of directors, which was fine when Google was a partner but not so great once Google started to make smartphones.
Google buys Android August 2005 (
http://www.businessweek.com/technology/content/aug2005/tc20050817_0949_tc024.htm )
Schmidt joins Apple's board August 2006 (
http://www.apple.com/pr/library/200...-Schmidt-Joins-Apples-Board-of-Directors.html )
Since Steve Jobs cherry picked every single member on the board ...... it is all Schmidt's fault I guess. The facts are Google was already smartphone business when Jobs selected Schmidt to be on the board.
Jobs didn't really go thermonuclear until after Google bought Admob right out from under Apple (because they moved too slow) in 2009 . Apple jumping into the ad business is going toe-to-toe with Google ( Jobs spun them as being in the search business .... that's not really what Google's core business is. )
iPhone features and UI gestures were discussed in board meetings which then were implemented into Android and available on day 1. Theoretically if Eric wasn't on Apple's board he would have had to copy it the old fashioned way after the iPhone was revealed. Instead, he used his position as an Apple director and got a huge head start.
If Jobs and Schmidt were doing what they suppose to do then Schmidt would have been excused from these demos. However, if he was present then Jobs probably just passed on that.
The other huge problem with this assertion is that Apple was the only ones doing softkeyboard like phones.
Huge problem with that is that LG had already demo'ed a phone with similar features in 2006.
http://www.appleinsider.com/article...ns_accuse_apple_of_copying_samsung_first.html
The LG Prada (
http://en.wikipedia.org/wiki/LG_Prada) had more physical buttons than the iPhone but then so did the original Android phones.
So the whole thing about Android jumping off the Sidekick/RIM clone process purely because of back-channel feedback from the Apple board room is a bit overstated. Several other cellphone companies were already going in that direction. If Google was talking to them about licensing they would have gotten feedback that "RIM" weren't exactly the direction those vendors were going.
As you pointed out, Steve got pretty mad about this. He must have took this as a personal or unethical attack. It's pretty much karma though, it's not like Steve has always been ethical and fair in competition.
There is an article in Business week about "Jobs last War" in which stated that in 2008 Jobs went to Google and offered up a couple of icons on the iPhone home screen if they stopped trying to make Android competitive. (or else he would go after them).
It is hard to believe that Jobs did not know that Google was working on Android while Schmidt was on the board. Android ( and Danger.... from which several Android folks came from. Danger did Sidekick before Microsoft killed it) was based in Palo Alto.... the town Jobs lived in. It was not a top secret that Google was working on "something".
Seems more likely that Jobs knew they were working on smartphones and wanted them to walk away since they had the deep pockets to make an open source phone OS work. (as opposed to the 3 or 4 other, soon to be aborted, Linux port projects turned out to be). Google would see the iPhone was so far ahead they would just give up and just settle for the "maps and search" fees that Apple would dribble off the table to them.