Move over GPS, here’s smartphone

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: Jenna Wortham

The smartphone is already the Swiss Army knife of the digital age—a quick flick of the finger can transform it into a camcorder, Web browser, gaming device or music player. For many consumers, the Apple iPhone and its competitors are versatile enough that they can get by without separate cameras and laptops.

Now the smartphone is beginning to displace yet another standalone device—the GPS receiver—as a convenient way for drivers to get directions to unknown destinations.

More than 40% of all smartphone owners use their mobile devices to get turn-by-turn directions, according to data from Compete, a Web analytics firm. For iPhone users, the figure is even higher, eclipsing 80%.

High-end phones like the BlackBerry from Research in Motion and the new Palm Pre increasingly come equipped with features common in portable navigational devices, like spacious touch-sensitive screens, intuitive menu designs and improved audio capabilities.

“The smartphone has made a lot of progress in the last year,” said Dominique Bonte, director of navigation research with ABI Research. “It gets very close to what people expect from the experience of the personal navigational device.”

Sales of traditional GPS units from companies like TomTom, Garmin and Magellan (a unit of MiTAC International) have fallen sharply recently. During the first quarter, TomTom said it shipped 29% fewer GPS units compared with the period in 2008. Garmin said unit sales fell 13% in the first quarter compared with the previous year.

The stock prices of both companies have also plunged, with shares down more than 80% from their late 2007 peaks.

Meanwhile, shipments of smartphones in North America are expected to grow by 25% this year, with more than 80% of them equipped with GPS, according to ABI Research. “It certainly gives personal navigation device makers a run for their money,” Bonte said.

He noted that many users still prefer the overall experience of dedicated GPS devices, which tap the Global Positioning System of satellites to determine locations and plot directions. GPS devices tend to render maps faster, because that data is typically stored on the unit rather than being refreshed through a mobile Web browser.

Smartphones, on the other hand, are susceptible to interruptions from incoming phone calls, and using the mapping features for a long time can chew through battery power. In addition, some smartphone GPS services require users to pay a monthly fee.