Google is reportedly building a native Gmail application for the iPhone and may have already submitted the app to Apple's App Store for approval.
Gmail is supported on the iPhone as a web app, and is accessible through Apple's native Mail application. Both systems work well, but a native Gmail app for the iPhone could provide more features found on Gmail, like adding labels, tags and priorities. The native Gmail app would feature push notifications.
Apple has a conflict of interest, however, since a Gmail app would directly compete with Apple's Mail app. Research from Return Path suggested that Gmail had 193 million users in 2010, but is growing faster than AOL Mail and Yahoo! Mail.
Apple would not allow Google to platform one of its most successful Google Apps on the iPhone, especially when users can access their Gmail several ways. The war between Apple and Google in the mobile market is already far too volatile, given Google's attempts to work with Samsung Electronics and Motorola Mobility to dethrone the iPhone with its Android operating system, and former Apple head Steve Jobs' declaration of war against Android. The two companies may both build consumer-friendly products, but the competition is anything but friendly.
Apple has used all kinds of excuses to reject potential applications for its App Store. For Gmail, Apple may choose to reject the app because it copies an existing functionality found in other mail clients, specifically its own. While the App Store's reasons for rejection have always been murky to say the least, Google can always submit an appeal with the App Review Board and attempt to persuade the board to lift the injunction.
As long as Android exists and the Mail client supports Gmail, don't expect a native Gmail app to show up in the App Store anytime soon.