(STAR) Apple Computer elected Google chief executive Eric Schmidt to its board of directors on Tuesday in a possible harbinger of an alliance between the technology titans.

"Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple's board of directors," Apple co-founder and chief executive Steve Jobs said in a release.

"Like Apple, Google is very focused on innovation and we think Eric's insights and experience will be very valuable in helping to guide Apple in the years ahead."

Schmidt has been Google's chief executive since July 2001 and became chairman of the Internet juggernaut board's executive committee in 2004. Google board members include the company's founders Sergey Brin and Larry Page.

"Apple is one of the companies in the world that I most admire," Schmidt said in a release.

"I'm really looking forward to working with Steve and Apple's board to help with all of the amazing things Apple is doing."

Schmidt's election to the Apple board was seen by analysts as a sign that the Cupertino, California, maker of iPod MP3 music players and Macintosh computers was courting new strategies and a monumental ally.

Schmidt's presence on the board upped the odds that Apple and Google would collaborate on projects, according to Rob Enderle, senior analyst at the Enderle Group in Silicon Valley.

"I would almost bet on it," Enderle told AFP. "I think Jobs realizes that Google could make the difference between Apple being successful or not long term."

Google has been building "a robust backbone" for online access to multimedia files while Apple has been "betting its future on multimedia," according to Enderle.

Schmidt has proven expertise in making lots of money with free Internet services subsidized by advertising and brings to the Apple board "one of the leading skill sets with bridging the old world with the new," Enderle said.

Schmidt was likely to counsel Apple to break from its practice of exclusively tying products together, as it did with its iPod MP3 player and iTunes online content store.

Apple's Macintosh computers have been shut out of emerging markets in countries where people do not have the money to pay for the top-end machines, Enderle said.

Those new markets have turned to less expensive and often cost-subsidized personal computers based on the Windows operating systems of rival Microsoft, analysts said.

"That has to cause Apple some concern," Enderle said.

Apple has also come under increasing fire from competitors intent on knocking iPod from its throne. IPod and Nano MP3 players command slightly more than 75 percent of the market, according to analysts.

America Online (AOL) took aim at the iPod-iTunes duo on Tuesday with a music service that lets US users download unlimited songs for a monthly fee rather than a per tune charge.

AOL billed its AOL Music Now as the first service to break from Apple's model of "a la carte" digital song sales to computer and MP3 music player users.

Apple's model of selling songs for 99 cents each, and albums and music videos also per download, has been the industry standard.

Meanwhile Universal Music Group, a unit of France-based Vivendi Universal, announced that it was backing a new advertising-supported free music website, New York-based SpiralFrog, which would challenge the iTunes model starting later this year.

Microsoft plans to unleash a "Zune" brand MP3 player and online content store by the year-end holiday shopping season.

"Eric is an ideal guy to have on the Apple board to argue for the future," Enderle said. "Google clearly understands what the new world can be like."

Chief News Editor: Sol Jose Vanzi

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