Let's start with the facts. Apple makes its major money in hardware. Google makes its major money in search. Obviously, iOS has to be able to compete with Android in order for iPhones to sell well. Google offers services like Google Now and Google Photos that can be tailored in a more personal and effective way. How? They collect as much data as they can get away with. Consumers get to have services that should be better suited to them because of this.
If Apple wants to compete, it seems that there are two options:
1. Start mass collection and become a better Google.
2. Reject Google's model, and build iOS around privacy and non-invasiveness.
That's what this is. I do think Apple will either make a search engine focused on privacy or buy one (e.g., DuckDuckGo). Personally, I am happy that Apple and Google are competing in this way.