The Wall Street Journal has a post on location based services, specifically the hopes of Nokia that introducing handsets that use GPS to enable services will allow them to maintain the price of their handsets. According to the article, “analysts expect many consumers will be prepared to pay more for a phone with navigation”, which would make it different from other new mobile services such as TV. There is a boom in the number of portable navigation devices being bought, with 9.9 million sold globally in the first nine months of 2006, more than twice the number in the first nine months of 2005, and they pay between 300-500 euros. It speaks to demand, but how well the handset manufacturers can turn that into demand for a converged device is another question. Mobile phones do have other advantages over stand-alone devices, which should help. 
Nokia apparently plans to give away maps and local searches for businesses like restaurants and hotels for free, and make money selling additional content like city guies and navigational services. “A Europe-wide subscription for the spoken turn-by-turn navigation service, for example, will cost 89 euro ($118) a year, for instance, or 9.99 euro a month. Meanwhile, the travel guides from partners including Berlitz International Inc., will cost about 10 euro for a one-off purchase.” As the WSJ points out, this is unlikely to make a huge difference to Nokia’s bottom line in the forseeable future, but by providing the service it will encourage the sale of handsets that use the service.