AMSTERDAM, USA: Google's foray into phone-based navigation makes it unlikely that TomTom, Garmin and Nokia will ever recoup their big recent investments in navigation technology.

Google said this week it would weave technology for driving directions and road data gathering into new versions of its Android operating system for smartphones. 

"The new Google navigation software for Android is a serious threat to TomTom, Garmin, and Nokia's navigation devices," said Pablo Perez-Fernandez, analyst at MKM Partners, referring to Google's Android software for running mobile phones.

Nokia and TomTom have splashed more than $12 billion in total on buying digital mapping firms Navteq and Tele Atlas.

Google's newly unveiled software, which offers real-time, turn-by-turn walking or driving directions, will already be available on Motorola's (MOT.N) Droid mobile phone launching next week. 

It will strike three potential blows to TomTom: personal navigation device sales, Tele Atlas digital map sales and iPhone software sales. TomTom also sells software for Microsoft Windows-based mobile phones, but not in significant volume.

"Google's free Maps Navigation product could be a game changer," said Rabo Securities analyst Hans Slob.

TomTom lost a third, and Garmin a fifth, of their market value -- a combined $1.7 billion -- since Google's announcement as investors wonder whether the firms can keep their grip on a market they were instrumental in creating.

The smartphone with Google navigation would be placed in a car dashboard holder -- like the other devices -- and have navigation information plus Street View images. Its success will depend on the accuracy and timeliness of giving directions.

The navigation market -- once a duopoly of Garmin and TomTom

-- has become more crowded, with the two market leaders facing -- has become more crowded, with the two market leaders facing stiff competition as the technology is adopted into devices such as Research In Motion's BlackBerry, Apple's iPhone, and similar offerings from Palm, Nokia and Taiwan's HTC. 

Developed three decades ago as a U.S. military technology, the use of global positioning system (GPS) satellites to pinpoint locations is now widely used by consumers for driving directions and accessing information relevant to their location.

Once bulky and found often in cars, GPS technology is now a standard feature on high-end mobile phones. But in between, TomTom and Garmin created a market for dedicated GPS devices that ushered in widespread adoption.

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TomTom and Garmin, recognising the growing threat from mobile phones, have started moving away from selling GPS hardware and software in a single package.

TomTom bought digital map maker TeleAtlas at the peak of the market for 2.9 billion euros and has launched software and hardware to turn Apple's iPhone into navigation units, while Garmin made its own navigation smartphone, the nuvifone.

Nokia, the world's largest mobile phone maker, needs to counter strong competition in the smartphone market as RIM, Apple and Google try to turn phones an all-in-one devices for e-mail, music, digital photos, gaming and navigation.

Google and Microsoft are vying to provide the software that will drive many of those features.

Google is also collecting live feedback data from mobile phones to obtain real-live traffic data, a similar feature that TomTom also promotes on its HD Traffic service, which sells for 7.95 euros per month. If Google gives such traffic data away for free, it weakens TomTom's ability to charge customers for it.

Yet despite its dominance on the Web, Google is facing three competitors with deep experience in their respective markets.

Nokia gets some cushion in Google battle from the scale of its cell phone operations -- there are more than 1 billion Nokia phones in the world.

Despite losing market share among smartphones to Apple and RIM, Nokia still controls more than a third of smartphone market, while Android still lacks scale.

"We do not know yet how fast smartphone manufacturers will adopt the Android operating system," said SNS Securities analyst Martijn den Drijver.

There is also a question of whether Google will introduce advertising to maps, similar to how it displays ads next to search results, which could change the business model further.