Last May, GPS-maker Navigon announced its withdrawal from the U.S. device market to focus its efforts on software, eliciting a collective gasp from the Consumer Reports GPS team. The European company seemed to be admitting defeat in the face of market domination by Garmin and TomTom. However, just days later, Forrester Research released an industry report predicting that phone-based navigation will dominate the market by 2013. Navigon, best known for its innovative features (reality view, free real-time traffic, three-dimensional terrain), is pioneering again by being the first portable navigation device company to offer an application for the Apple iPhone through the iTunes store.

We have just completed testing of the Navigon Mobile Navigator North America for the iPhone 3G and 3GS. A full report will be posted soon, along with a review of the XRoad G-Map. (See our initial XRoad G-Map test drive.)

Unlike some carrier-based cell-phone navigation services that charge by the day or month for navigation, Navigon has a one-time fee for the software. It includes full North American maps, rather than just regional maps like the previously tested XRoad G-Map. The application itself mimics past Navigon devices, even providing reality view and lane assist to aid in negotiating major exchanges. It feels like a portable navigation device (PND) emulated on the popular iPhone, though laboratory and real-world testing revealed several short comings that, for now, show that a traditional dash-top navigator may be the best choice for most shoppers.

For instance, we found that the GPS accuracy with Mobile Navigator and G-Map is not as precise as with traditional navigation devices. The GPS will often place the current position on a surrounding road, rather than the road a user is actually traveling on. This will cause the software to recalculate, which needless to say is annoying and confusing. We also experienced times when the iPhone unexpectedly lost GPS reception. 

Another concern is the price. At $70, the Mobile Navigator is about half the price of CR Recommended budget models. However, a mount and car charger could reasonably add $35. (The price will increase to $100 on August 15th.) While still less money than say a Garmin Nuvi 205 or TomTom One 140 with the necessary accessories, there are compromises with both the software and the device itself.

Ultimately, the version name says it all: 1.0.0. This is just the beginning for professional iPhone navigation applications, and we expect they will rapidly evolve. We will monitor this emerging segment, testing the major entries, including the TomTom app expected late this summer.

See our previous report on cell-phone navigation. See our full reviews of AT&T Navigator, iGo My Way, Navigon Mobile Navigator, Sygic Mobile Maps, TomTom iPhone application, and X Road G-Map.

—Jeff Bartlett and Frank Spinelli

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