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You may remember when Google’s Nexus One came out and was bundled with the newest version of Android. The biggest talking point was the GPS navigation feature that the tech media and analyst corps quickly pinned as the death of standalone navigation systems. Now this week it announced support in 10 European countries.

The death knell prediction still could be true, but one formidable player in the nav space, TeleNav, is welcoming Google to the party. The reason? For a long time, the company has intelligently been diversifying beyond after-market standalone products and providing navigation software for mobile carriers and app makers.

Now that it’s part of that race, it sees it as a sizable growth opportunity. And Google’s presence, as it often does, should raise awareness and consumer acclimation with the “use case” of mobile device navigation. Of course Google’s app is free, (after the cost of a phone and data plan), but TeleNav argues that its own feature set is worth a premium.

With AT&T’s $9.99/ month Navigator app, for example, it offers human guided voice. Google instead has kludgy text-to-speech technology. As more Android users get accustomed to the experience, it could be training wheels for a more robust app … like the growing number of TeleNav-powered apps in the market.

It could just be right as it added 2 million new subscribers in the first quarter for a grand total of 14.5 million. And it will continue to seek out new deals to join AT&T, Sprint Nextel and T-Mobile. Time is a factor as Google’s coopetition is joined by Microsoft’s recently released free mobile navigation app for Windows Mobile devices.

To diversify even further, TeleNav is utilizing its position in mapping to start to bring ads into the picture. The two can go hand in hand as local directions are often accompanied by local needs. Like its move into a mobile software vendor model, ad support could be a supplemental growth engine.

And just at the right time. Outside of specialized markets (adventure sports, hiking, etc.) and pre-market units (in-car), many navigation systems providers might literally have to innovate or die.

More from an in-depth Forbes story.

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