A side effect of the appeal of LBS on omnipresent devices like cell phones is that standalone GPS devices could go the way of the PDA. ...The world's No. 1 handset maker stepped in instead, leaving Google and any others fairly slim pickings in terms of acquisition targets now that the two biggest LBS companies have been snatched up.

Primarily, people aren't going to start purchasing and using cell phones (and paying the requisite premium fees) for GPS when they are pretty much standard in all new cars and continue to make gifts and add-ons in the short term. Phones didn't kill MP3 players - they didn't kill digital cameras - and they didn't kill gaming systems, even though most phones now come with these capabilities.

The deal announced Monday is one that Nokia's longtime rival, Motorola, would have trouble even doing, given the red ink flooding its cell phone business this year.

"Motorola is struggling right now and doesn't really have the currency or the market share of Nokia to justify that kind of purchase," said Mark McKechnie, a stock analyst at American Technology Research.

...The deal is a sweet one for Green, a Quincy, Ill., native and former Walt Disney Co. executive who became Navteq's CEO in 2000. Once it closes, he should reap about $175 million through stock options and restricted stock, securities documents show.

...A source close to Navteq said the talks turned from alliance to courtship about a month ago.

Nokia today bought NAVTEQ, a GPS service with ownership of the The Map Network, the largest maps supplier in the US. This means Nokia Maps will become even more detailed and comprehensive, not to mention up-to-date.

Richard Windsor, analyst at Nomura, said: “This is an expensive, defensive move.”

He added that the deal was partly about enabling Nokia to “keep one step ahead of companies such as Google, Yahoo! and Apple who are all trying to get a piece of the mobile content and services market”.

The real question raised by all of this is whether or not Nokia will make Google pay through the nose to continue using Navteq for Google Maps's mobile iteration. Although it would be a shrewd, if not profitable move, one would think that Nokia would have enough sense to reach a reasonable deal and milk revenue off of the search giant's rapidly expanding mobile phone aspirations.

Of course, TomTom's interest in scooping up Google's second GPS bedfellow (Tele Atlas), it's looking like forking over a chunk of change for GPS functionality may be unavoidable for the company.

The smart move for Nokia would be to negotiate with Google to share in any future map-based advertising revenues in return for distributing the mobile version of Google Maps with every new Nokia phone. (The cell phone carriers would have to be brought into the negotiations and given a cut as well, but it could be done). That way, consumers would get free maps and a reason to stick with Nokia. And Nokia won’t have to try to beat Google at its own game. Google has a much better chance of figuring out mobile advertising than Nokia, and its mapping software already has a huge following among both consumers and developers.

In a two fisted attack on Apple Inc.'s (NASDAQ: AAPL) iPhone, The Associated Press reports that Nokia Corp. (NYSE: NOK) is buying navigation software maker Navteq Corp. (NASDAQ: NVT) for $8.1 billion at the same time that it launches a humorous ad campaign that disses the iPhone.

These moves are putting the iPhone in Nokia's cross-hairs.