A source familiar with the situation tells Paczkowski, "There were a number of issues inflaming negotiations, but voice navigation was the biggest ... Ultimately, it was a deal-breaker."
Apple tried to negotiate with Google to get turn-by-turn navigation, but Google wouldn't give up that data without some concessions from Apple. Google wanted more Google branding in the maps as well as the inclusion of Lattitude, Google's Foursquare-esque social network that tracks people if they opt-in.
Apple didn't want to include either of those things in its maps. So it decided to do its own maps. The result has been a PR disaster for Apple. There are numerous complaints from users about mislabled, or just missing locations. Users are angry at Apple for removing Google-based maps for a product that's inferior. But, it looks like Apple might not have had much of a choice.
It was either going to have to offer maps that were missing turn-by-turn directions, thus making them weaker than Android, or it was going to have to ugly Google branding and hand over more user data to Google through Latitude.
Source: http://www.businessinsider.com/why-apple-no-longer-has-google-based-maps-on-the-iphone-2012-9
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