Well, here’s a few things:
1. Apple doesn’t really supply the GPS middlewhere on the iPhone. They have the chip, of course, and they made the UI (Steve’s even boasted about it on stage!), but the App itself is “powered” by Google Maps. So, the functionality of the App is in some ways limited to the functionality provided by Google. For example, we’re seeing street-view, transit, and walking directions in iPhone 2.2 Beta 2. Why? Because Google has been rolling that out across smartphone platforms, starting with Android. Do any devices have Google-powered tun-by-turn yet? Not to our knowledge. And there may be a reason for that…
2. Licensing conflicts. Google doesn’t own the maps they serve. They license them from Tele Atlas and Navteq. Dieter pointed out a while back that Google’s “API only provides Tele Atlas data, it appears that it’s prohibited from serving Navteq data. As early as ‘05 there has been speculation that there was some sort of license fight between Google and Navteq and both sides decided to take their ball and go home.” This looks like a pretty complicated and potentially deal-breaking deadlock (read the whole article for more). And it’s not the only legal problem…
3. Apple’s iPhone SDK agreement currently prohibits 3rd party turn-by-turn Apps. This could be to avoid the licensing issues mentioned previously, to leave the door open for an “officially licensed” version if Apple and Google can come to an agreement with the licensors (who may not want to see a competitive convergent device like the iPhone get that functionality), or because Apple feels they’ll be sued by the first brainiac who tries to switch between turn-by-turn and SMS and back while driving into a lake.
4. Why can’t TomTom or another dedicated GPS manufacturer release an iPhone App directly, using their own Apps? After all, TomTom has already said they’ve made their system run on the iPhone. The App Store has a reported 2GB size limit, so there’s likely space enough for a robust install. Despite the SDK licensing restrictions, however, would a company like TomTom feel iPhone App sales would make up for the loss of dedicated hardware unit sales they’d face? There have been stories about the dedicated GPS players fearing the iPhone (and other convergence devices) would put them out of business. Let’s remember when Popular Mechanics asked the president of a GPS navigation system manufacturer how he felt about the prospect of a GPS-enabled iPhone, the president said he was: “Scared [expletive]-less“.
5. Could all of the above issues be at play? Apple’s head of iPhone Marketing, Greg “Joz” Joswiak, previously said: “there are some murky “complicated issues” preventing driving directions apps at the moment. ‘It will evolve. I think our developers will amaze us.’ “