I think that's one of the reasons Scott Forstall was forced out. It seems he was backing a lot of Apple's Data / AI / Cloud products, and may have wanted to keep Google out of iOS, in order to give his products an advantage. But Apple doesn't make money on Maps, it makes money selling the phone (and OS, and App store), and it's silly to hamstring your platform simply to give a few second-rate Apps an unfair advantage. (And they were second-rate - anyone who competes with Google's killer apps is taking a crazy risk).
Now, as i already said here, the problem isn't that they need to get better at service, the problem is that they need not to be absolute crap, and get some culture. If Apple Maps was only just as good as bing map, they could have made it. If iCloud was only just as good as dropbox, they could have made it. If "Ping" was only as good as... just any social network you could think of, then it could have leverage the other great apple system.
The problem is that their server side is so bad, it can't even leverage other Apple strengths.
They may care now that they own an Android phonemaker (Motorola.)
The remaining goal posts by the way are where apps get built first and general app quality. The time that developers move to Android after first making their app on iOS is probably shrinking. The disparity of where apps get made first is also probably shrinking.
Another point about why is Android doing so well: Apple seriously needs to get better at services. They are amazing at hardware, they are great at software that runs on devices, but they have bombed again and again on software that runs as a service in the cloud. This severely limits them. Maps, mobile me, icloud syncing, they have trouble keeping their developer portal up, etc. I believe this is a problem with Apple's culture and what they value. Server software isn't pretty, and it's iterative. That is you bring up something that works, then make it better. Apple's culture is to wow with the first try, but they've been disappointing when it comes to software as a service.