My understanding was this happened during contract renewal for Apple's access to Google Maps and YouTube. This was back when Apple wrote the apps and had them preinstalled.

For Maps specifically, Google wanted Apple to

- push users to log into their Google account

- sharing location data upstream to Google

Supposedly, Google had withheld new feature access from Apple until they got location data reported upstream - turn by turn and vector tiles in particular hurt, as their absence made maps have a limited feature set and use significantly more bandwidth.

The buzz at the time made it sound like Google was still in negotiations when Apple announced at WWDC that they would be using their own maps. They were pretty much blindsided - one of the reasons it took a while before a Google Maps app actually launched for iOS.

Apple likely just decided to launch the product early. The quality of that early launch and how it was handled publicly (along with other internal disputes) is supposedly why Forstall was shown the door.

The first part of what you said lines up with my memories of that era. As for the negotiations, the scuttlebutt at the time was that Apple was worried negotiations with Google would break down, as tensions were already rising between the two, since there was some animosity over Eric Schmidt possibly using his knowledge of Apple's product roadmap (he was a member of Apple's board at the time) to help Android. Since the contract ended at the end of the calendar year, it would potentially leave Apple with a non-functional maps app; since Apple didn't (and still doesn't, although they're getting better about this) like to ship big feature updates outside of major OS releases, it was either release their own mapping service before it was fully-cooked or give in to Google's demands.