Google has released a beta of Google Sync for Mobile which includes support for various smartphones including the iPhone. Previously, only Blackberries were supported. The beta, which was announced this morning on the Google Mobile blog, introduces true push syncing for Google calendar and Google contacts. In my mind, this is the nail in the coffin for Apple's MobileMe service.
Google's products are faster, more full featured and generally mature, and more universally supported. Now they have push syncing, which was previously MobileMe's big selling point for iPhone users (they also advertise syncing across computers, but that's mostly because Me.com is a website available on any computer... needless to say Google's got some experience there). Apple's remaining advantage is dedicated storage (for Mac users) and its (questionably reliable) push email service. But is $99/year worth having push email instead of email every 15 minutes? And such underpowered email at that... I expect that Apple will have to respond somehow, or risk losing a fair share of their subscriber base.
In my casual testing, this beta of Google Sync works better than MobileMe ever did. A contact I created on my iPhone with the imaginative name "test" and a fake phone number showed up in my gmail contacts within seconds. I deleted it through gmail and when I reopened my contacts on my phone, it was gone. I took advantage of the novelty to do some overdue phonebook pruning, and was pleased that each deletion/consolidation/edit was instantly reflected on the phone. I'm not a big Google Calendar user so I can't speak to the utility there, but just having true contact syncing (you could sort of half way cajole an iPhone to sync with Google before) is fantastic.