Amidst increasing rivalry between Apple and Google, reports are circulating that Apple is in talks with Microsoft to make Bing! the default browser for iPhone.

The unlikely alliance goes to show the new lines that are being drawn in the battle over the technology market.

Apple and Google have recently begun competing in several markets, most notably in the mobile arena: Google’s release of the Nexus One smart phone now puts them in direct competition with the iPhone.

A deal between Apple and Microsoft would be worth millions as iPhone users would automatically get Bing as their default net browser, instead of Google’s Safari.

With Bing accounting for just 11% of the mobile search market, Microsoft have everything to play for. Google currently account for 86% of mobile searches.

It woouldn’t be the first time Apple and Microsoft have paired up – Microsoft continue to provide Office updates for Mac.

But given Apple’s desire to slow down Google, don’t bet that Apple aren’t developing a search engine of their own, in which case that a deal will more likely be a tactic to buy themselves time.