It's not like I have any real knowledge of this, but from what I've read, the whole idea behind Android is that Google wants to ensure that their applications (Maps, Search, Youtube, etc) are used on as many mobile devices as possible (hence the free Android platform).
From what I've seen, this seems to follow. Google isn't putting out their own hardware device, just the platform to ensure that they still accrue advertising revenue. Google would probably love to have as many of their applications on the iPhone as possible. It stands to reason that you might see tighter integration of those applications on an Android device, but those same applications will quickly work themselves (Apple permitting) onto the iPhone. Again, this is what it seems to me is happening, but I really only know what I read so time will tell.