EE Times
attempts to explain the difference.
Conventional wisdom would hold that the natural migration of global positioning technology into handsets at minimal cost means the integration of RF and digital functions into the same device, with a "no chip" GPS solution as the end game. The most notable proponent of that architectural approach is Qualcomm Inc. (San Diego), which for years has been integrating GPS processors into digital baseband chips for CDMA handsets.
But there is an alternate approach: providing standalone GPS silicon and intellectual property (IP) for integration, as has been done for Bluetooth and Wi-Fi functionality.
By far the biggest supplier of standalone GPS silicon and associated software is SiRF Technology (San Jose, Calif.), which has enjoyed significant market share for standalone PNDs and is seeing its chips increasingly designed into mobile phones.
Author John Walko picks Qualcomm as the longterm winner.
The core owner will maintain control over their platform, and once a market is validated by their partner...will extend functionality of the core.
You can take that model to the bank, no matter what technology you're talking about.