If there’s anything the iPhone has lacked compared with other phones in its class, it has been high-speed connectivity and the ability to determine its location accurately. Apple will address the first shortcoming in a matter of days, when it unveils the second version of the year-old iPhone on June 9.

I’m hoping Apple plus tackles No. 2 — by including support for Global Positioning System navigation. For one thing, most of the handsets in the iPhone’s peer group contain GPS chips by default. Research In Motion’s BlackBerry devices have included GPS support for a few years now, while Finland’s Nokia considers GPS so strategically critical that last year it spent $8.1 billion to acquire Chicago’s Navteq, a digital mapmaker that supplies all the major navigation device companies.

What’s more, navigation applications can manufacture a lot of money for carriers, and by extension, Apple, which splits service revenue with AT&T, its partner in the U.S. A

survey last year by Nielsen Mobile found that navigation applications were second only to games as the most popular downloadable wireless application. Companies like TeleNav and Networks In Motion have deals to supply their software and services to all the major carriers. The potential market is huge: iSuppli pegged the number of navigation-ready handsets sold last year at north of 160 million units, more than seven times the number of standalone navigation devices sold.

Using Cell Towers Doesn’t Cut It

The iPhone currently employs a system often described as pseudo GPS to determine its location. Instead of getting a true location fix from the GPS satellites orbiting Earth, it determines its position in part by using the nearest cell towers, using technology from Google. It additionally fixes its location based on Wi-Fi access points using another technology from Skyhook Wireless.

The outcome is adequate for the casual pedestrian user,…

Orginal post by Mike

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