BlackBerry Gets Back to Business

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At the same time, the Federal Communications Commission came down with its E911 mandate, which essentially ordered all wireless carriers and phone manufacturers to find a way to make it easy for emergency personnel to locate a wireless phone when its owner dials 911.

Carriers using one flavor of network technology—CDMA—like Verizon Wireless and Sprint opted to use a technology based on GPS, meaning that phones for those networks have GPS chips built in. Carriers using the other flavor of wireless technology—GSM—like T-Mobile (DT) and Cingular-AT&T opted for an approach that relies more on determining the phone's position relative to wireless towers. As a result, it's rare for GSM phones to contain GPS chips, which sets RIM's 8800 apart from others like it in the market.

Expanding Partnerships

"The GSM companies basically avoided using GPS because of the additional cost," Dhanani says. "But using the network-based approach didn't work as well as was hoped, and so I think you'll be seeing more GSM phones getting GPS chipsets." That represents an important opportunity for TeleNav, and an advantage (at least temporarily) to RIM.

But RIM isn't TeleNav's only partner. The company has versions of its navigation software running on Windows Mobile, the Palm operating system, Symbian, Qualcomm's (QCOM) Brew, and the Java-based J2ME environment from Sun Microsystems (SUNW).

And TeleNav isn't the only player in its own space. One competitor, a startup called Networks In Motion, offers wireless carriers a navigation service they can include on the phones they carry. Its partners include Verizon Wireless, Sprint Nextel, and Alltel Wireless (AT).

Got Navigation?

Meanwhile, RIM isn't the only device maker adding navigation as a major feature. Finland's Nokia announced its 6110 Navigator phone, a GPS-enabled phone that is the result of Nokia's acquisition last year of gate5, a German company. Additionally, Nokia struck a patent licensing deal with Trimble Navigation (TRMB) that allows the handset maker to use some of Trimble's technology in its devices.

In addition to navigation, the 8800 is also a powerful Internet-enabled messaging device that will do what BlackBerry devices have always done well—e-mail—as well as music and video.

Hesseldahl is a reporter for BusinessWeek.com.