Google is now offering not only free map functionality found on competitor devices, but a free turn by turn navigation application that we have all grown to love (And we are used to paying for). The equivalent applications on the iPhone cost around $99 from the App Store, but they are absolutely free on the Android platform. Not only is it free, but it now links in to Google's traffic data, helping route you around congested routes (In supported cities).
Google is able to do this because they have spent the time developing their own data to pull from, rather than relying on the two providers of turn by turn data. All other GPS manufacturers and iPhone app developers have to license this data from one of two companies. This means that if Apple wants to have a similar application free on their device, they are going to have to take a loss on the application because they will have to pay for the data the application will use.
Not only do users get the application for free, but Google (From what I've heard, but I can't confirm this) will be paying the carriers a portion of the Add revenue generated from the use of Google's application, Search and related advertising. This is a less than free model that Apple and RIM can't compete with. As a carrier, why would you chose differently? You can charge a customer for the handset AND get a portion of the add pie from Google.
If I was Apple, RIM or a GPS manufacturer, I would be scared for the future, especially with the costs of producing these handsets coming down. Why would I have a GPS and a phone, when I can have an Android handset with both?
Personally, this is causing me to wait to buy a smartphone. I'll be happy to replace my Blackberry with a Android device when the timings right. Sorry Apple.