With Google Maps Navigation, Google is competing with GPS navigation devices from the likes of TomTom and Garmin, as well as navigation platforms developed by wireless carriers like AT&T , Verizon and Sprint Nextel. The first smartphone with the new service will be the Motorola Droid from Verizon Wireless.

"This new feature comes with everything you'd expect to find in a GPS navigation system, like 3-D views, turn-by-turn voice guidance, and automatic rerouting," said Google software engineer Keith Ito. "But unlike most navigation systems, Google Maps Navigation was built from the ground up to take advantage of your phone's Internet connection."

Under the Hood

Google pointed to several features that are possible because Google Maps Navigation is connected to the Internet. For example, the phone automatically gets the most up-to-date maps and business listings from Google Maps.

Google Maps Navigation also aims to provide a Google search-like experience. If users don't know the address they are looking for, they can enter the name of a business, landmark or other information in the search box and Google will find it. Consumers can also use a voice-control feature so they don't have to type and drive at the same time.

Google Maps Navigation gets live traffic data over the Internet. A traffic indicator light in the corner of the screen glows green, yellow or red, depending on current traffic conditions along a route. Consumers can get more info by tapping the light to zoom out to an aerial view showing traffic speeds and incidents ahead. If the traffic doesn't look good, users can choose an alternate route.

Google Maps Navigation uses the same satellite images as Google Maps on the desktop. Consumers can turn on the satellite layer for a high-resolution, 3-D view of a route. Besides looking cool, Ito said, satellite view helps make sense of complicated maneuvers.

"If you want to know what your next turn looks like, double-tap the map to zoom into Street View, which shows the turn as you'll see it, with your route overlaid," Ito said. "And since locating an address can sometimes be tricky, we'll show you a picture of your destination as you approach the end of your route, so you'll know exactly what to look for."

Google vs TomTom

Right now, Google Maps Navigation is only available for Android 2.0 phones, which gives it a limited audience. But Greg Sterling, principal analyst at Sterling Market Intelligence, expects the software to be available for other smartphone platforms in the future.

"When it gets to the point that Google Maps Navigation penetrates broadly across mobile handsets, then the impact will be quite negative on the carrier subscription network services as well as the GPS personal-navigation devices," Sterling said. "Personal-navigation devices are already suffering because of smartphones and the fact that there are some pretty good maps and applications."

The most prominent is the $99 TomTom iPhone app. Sterling said the notion that Google Maps Navigation will come to the iPhone could suppress demand for the TomTom app. "Why would you spend $100 for an app if you anticipated that a free app from Google with all these features is going to show up relatively soon?"