iSuppli Corp. announced that the cell phone usage for navigation and Location Based Services and the use of Global Positioning Technology or GPS is expected to increase significantly in the coming years.

According to iSuppli sources in the fourth quarter of 2011, 79.9 percent of cell phones shipped, numbering about 318.3 million units will incorporate GPS functionality. The number is up from 56.1 percent in the first quarter of 2009 which amounts to 187.8 million units. This wide adoption of GPS in mobile handsets is due to the growing demand for smart phones.

Dr. Jagdish Rebello, director and principal analyst for iSuppli said, “The smart phone is the key product driving the technology industry today—and social networking services and applications spurred by GPS-related features are critical elements in the smart phone market today.”

“This is illustrated by Google (News - Alert) Inc.’s decision to make turn-by-turn navigation, LBS and mobile ads the central features in its bid to take on Apple in the smart phone market, and make up the central pillars of its strategy to increasingly monetize mobile search,” Rebello added.

It was also revealed that smart phones were overriding Portable Navigation Devices or PNDs as a major platform for navigation. According to statistical data available, by 2014 usage of navigation-enabled smart phones will also exceed that of PNDs.

Also it is expected that smart phones will generate many innovative LBS apps in the following five years as is relevant from the fact that Apple iPhone (News - Alert) already has over 6,000 LBS apps.

Apple and Google are both focusing on mobile advertising as a chief capability and a major source of revenue used along with LBS, said iSuppli sources.

According to official sources Apple’s (News - Alert) new iAd platform, which is a part of the company’s updated iPhone OS 4 operating system allows the embedding of advertisements into applications. This enables iPhone users to interact with the advertisement without leaving the application. To keep itself abreast in the fray Google acquired leading mobile ad provider AdMob (News - Alert).

However Apple soon came up with a gyroscope addition in the smart phone GPS segment in its new model. Along with the GPS capability, an accelerometer and a compass, the gyroscope can be used in indoor navigation with floor accuracy.

iSuppli sources added that an increased penetration of embedded GPS will be witnessed in consumer and compute electronic devices by 2014. About 18 percent of laptops and 42 percent of portable handheld video game players will be embedded with GPS by 2014.

The increase in demand for GPS technology will also result in growth of business for semiconductor suppliers such as Texas Instruments, Broadcom (News - Alert) Corp., Infineon Technologies and CSR.

iSuppli officials concluded that GPS will not be the only embedded connectivity technology that will be increasingly embedded in consumer and compute electronics devices.

The ratification of the Bluetooth 4.0 standard supporting the Bluetooth Low Energy profile, will result in increased penetration of Bluetooth in wireless mice, keypads and other interface devices available in the mobile and desktop market.