There were rumors of Microsoft Bing replacing Google search as default on the iPhone. However, some more details have surfaced on this and according to that; Google is still to remain as the default search on iPhone as it has always been.
This issue sparked when Microsoft started talking to Apple about including Bing as a search option on iPhone and not necessarily as a replacement to the Google search option.
Most mobile devices currently include the option of Google search and Yahoo search though, Google is the default option everywhere and very few people know that Yahoo even exists in the option, a fewer of them changing the option to Yahoo.
What Microsoft is trying to do for its Bing search here, is get included as a third option in that list. Given the kind of relation Apple has with Microsoft and the amount of revenues a Google search can generate, it is unlikely that the option will be changed to anything else.
Though, this rumor can turn into a reality given the tension developing between Google and Apple in their competition into common areas. Google has readily attacked Apple in the I/O conference and is being forward in this animosity. Apple has not yet confirmed the nature of this inclusion.