Why is this a big deal? Well, to put it frankly, Apple and Google -- long partners -- are clearly competitors on many fronts now. Both companies offer Web browsers, mobile operating systems, photo editing software, document, presentation and spreadsheet software, email services and much more.
Schmidt's position at/near the helm of both companies meant he was party to information that could give either Apple or Google a competitive advantage.
"Eric has been an excellent Board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful," said Steve Jobs, Apple's CEO. "Unfortunately, as Google enters more of Apple's core businesses, with Android and now Chrome OS, Eric's effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple's Board."
This news will most likely be met with some relief from shareholders of both companies.