There’s a rumor that Taiwanese device manufacturers are already diverting R&D resources from GPS device projects due to lower orders this year. This could be the first sign of the smartphone market shredding specialized navigation device market share.

The personal navigation device has become hot over the last few years as hardware prices made them more affordable to consumers. In fact, it’s hard to drive down the road without seeing one plastered to another driver’s windshield.

However some people are saying that the miniature mapping device’s days could be numbered. As smartphones begin to incorporate turn-by-turn driving directions, do we still need a separate device dedicated to mapping?

Some people claim that a different device is useful for those that like to talk on their phones while driving. While drivers could potentially solve this problem using a hands free device for chatting, it’s still a problem for many.

Besides, smartphone applications are still pretty behind PNDs in terms of their usability and point-of-interest data. While they can help you navigate, smartphones usually require more fumbling around with than their dedicated counterparts.

Maybe instead of replacing navigation devices with smartphones, device makers should look at incorporating the lessons from PND makers into their smartphone interfaces. Garmin attempted to release the dual-purpose Nuvifone, which was good in concept but expensive and lacking in terms of phone capabilities.

Over time these markets will likely need to merge rather than just diverting dollars away from navigation projects. After all, location-based functionality is becoming more prevalent and not less.

And for the diehard fans of GPS devices, the chances are that they will still chug along if for nothing else than specialized outdoors applications such as hikers. And that’s only once smartphone navigation applications are ubiquitous and ready for primetime.

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