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What is GPS? How does the iPhone GPS system work? Can it be used for real-time navigation in a car?
A satellite-based navigation system made up of a network of 24 satellites placed into orbit by the U.S. Department of Defense. GPS was originally intended for military applications, but in the 1980s, the government made the system available for civilian use. . .
GPS satellites circle the earth twice a day in a very precise orbit and transmit signal information to earth. GPS receivers take this information and use triangulation to calculate the user's exact location. Essentially, the GPS receiver compares the time a signal was transmitted by a satellite with the time it was received. The time difference tells the GPS receiver how far away the satellite is. Now, with distance measurements from a few more satellites, the receiver can determine the user's position and display it on the unit's electronic map.
Garmin's complete definition and details are quite interesting and should be read in their entirety.
iPhone GPS Support
The iPhone 3G and all subsequently released iPhone models use A-GPS -- or "Assisted GPS" -- which in basic terms accesses an intermediary server when it is not possible to connect directly via satellite -- indoors, for example -- and this server provides the nearest satellite with additional information to make it possible to more accurately determine a users position.
Apple explains that the iPhone 3G and all later models also use "wi-fi hotspots and cellular towers to get the most accurate location fast" when GPS is not the most convenient method of location detection. The iPhone 3GS, iPhone 4, iPhone 4S, and iPhone 5 models additionally have an integrated digital compass to also provide the direction one is facing, which is quite useful when combined with mapping software.
When combined with a service, most iPhone models are capable of providing real-time navigation. The original iPhone is not.