In the portable GPS navigation world, we have seen a rapid succession of new features come out that have made these popular devices more useful. Each generation seems to raise the bar for expectations, with the latest breakthroughs including reality views, historical traffic data, and user-sourced real-time traffic data. Rarely does a new device emerge to threaten the establishment, but the Apple iPhone 3G may prove to be an interesting alternative to today’s portable navigation devices (PND) for wired travelers.

The iPhone 3G is a cell phone, GPS navigator, and mobile computer all in one. A major downside is that the price service fees reflect the considerable bandwidth that an iPhone user is likely to draw, and these costs are greater than the model it replaces. (Read: "New iPhone: Lower price, higher cost.")

Today’s iPhone
The current iPhones provide navigational aid using the Skyhook Wi-Fi Positioning System, aka WPS, and cellular towers. This method can determine the user’s approximate location and help them navigate from there, indoors or out. Rather than have a national map and detailed points of interest database clogging the onboard memory, the iPhone can download information as needed from Google for real-time mapping, ensuring currency and avoiding the need for periodic, fee-based map updates. Text directions are given turn by turn, but the current iPhone doesn’t follow the vehicle in motion the way a dedicated navigation device does.

New iPhone 3G
An all-in-one, convergence device, the new iPhone 3G can use signals from Wi-Fi hot spots and cellular towers, as well as GPS satellites to pinpoint a location. In addition, Apple claims to use "A-GPS," or Assisted GPS, to help the device get a quicker location fix than traditional GPS technology. The 3G’s speed enables the device to multi-task, so a call can be taken while the device continues to provide route guidance. Again, Google Maps provides the display, with a choice of map, satellite, and hybrid views—just like online.

The $199 starting price of the 8GB model would seem a true threat to even aggressively priced PNDs at first glance, however, like smart phones, the true expense is in the service plan. Buyers are required to sign a two-year contract with AT&T, requiring a major commitment and investment.

Sizing up the navigator
As a true convergence device, the iPhone 3G can make interesting use of its connectivity and features. For instance, it has the ability to take a photograph and geotag it using location information. Also, Apple suggests that GPS-enabled applications will be available, such as friend finders and city guides. Like the Dash Express, the iPhone’s Internet connection and cell-phone abilities may lead to new ways to use location information.

The display screen measures 3.5 inches in a wide aspect ratio, making it large enough to serve as a portable navigator, but it doesn’t have the screen real estate of a wide-screen PND.

While the connectivity has promise, a typical navigation device has all the data it needs onboard to provide guidance anywhere in the country without concern for network access. Dedicated navigation devices commonly include three free months of traffic service (if capable) to allow users to try it. Then owners can choose to pay a monthly or annual fee, typically costing about $60 a year, if they’d like to continue. Clearly, a consumer who seeks a portable navigator has to look beyond the sleek casing to consider both the performance and the costs with the iPhone. In the end, the iPhone may better address the smart phone shopper interested in GPS, than the other way around. Time will tell.

We have not yet used the iPhone 3G, though we will test its navigational abilities soon as we get our hands on one, after its July 11th on-sale date. Between the Consumer Reports GPS and phone technical teams, we’ll judge how this clever device works in both arenas.

—Jeff Bartlett

For more information on portable GPS navigation systems, see our Ratings and buying advice and watch our video guide. Discuss GPS devices in the forums. 

For more on the iPhone 3G, read posts from our colleagues at the Consumer Reports Electronics blog.