There is nothing stopping manufacturers licensing google's technology provided their pricing is fair, why reinvent the wheel when you can go with some one that has brand recognition and is proven?
It's a nice play by google but I don't think it will have a great impact on the market overall. As more cars come with integrated, and specialized, GPS navigation systems the desire for handheld units will start declining. There's an opportunity now but probably not 5-10 years from now.
When the next iPhone is released next summer it will be interesting to see how Apple raises their game (or doesn't).