After months of speculation, Apple has unveiled the second edition of its popular, but oft-derided, iPhone this week. The AP reports that the new version will be "$200 cheaper -- and come with satellite navigation, faster Internet access and other new features -- but higher monthly service charges are likely to erase most of the savings."

Wired comments that portable nav suppliers are "Scared %#*@less." 

The new iPhone 3G offers nav services through Google Maps.

Portable navigation systems have already cut heavily into the success of the built in navigation systems offered by most carmakers.  "But with mobile-phone based navigation gaining ground -- and the new 3-G iPhone expected to debut on Monday with full GPS capability -- portable navs could soon face a similar fate," Wired says.  The most significant challenge remaining, they comment, "will be how to deal with driver distraction issues in moving from the small screen of portable navs to the even smaller screen of mobile phones."

Popular Mechanics sees two challenges that must be met before the iPhone is truly competitive with portable navigation systems.  First is a car dock. While Apple Founder Steve Jobs has "made no hints to the existence of any such products from his company, there are likely a dozen Apple accessory makers…who have already put in factory orders."  Second is "decent navigation software."  PM adds, "After all, that overhead Google Maps view can only take you so far."

Some existing nav companies are working to provide enhanced navigation software for the iPhone as fast as they can.  Reuters reports, "Dutch navigation device maker TomTom already has a version of its navigation software running on Apple's iPhone and has plans to sell it to consumers, a spokesman said on Monday."

Yahoo reports that TomTom's software will run on first-generation iPhones as well.

Others plan to try to compete with the iPhone.  The Kansas City Star reports that Garmin "is planning to launch an iPhone-like navigation phone later this year."

TechNewsWorld reports that Samsung's iPhone rival, the Omnia, will also feature "a GPS receiver offering navigation and geo-tagging capabilities."

Debating whether to buy a portable nav system or wait for the new iPhone?  Read our nav system buying tips before you invest.