A compass for the iPhone?

    By Philip Elmer-DeWitt

    Ever since Apple (AAPL) shipped the first beta version of iPhone 3.0, the new firmware scheduled for release this summer, developers have been mining it for evidence of any new hardware features that might appear in the next iPhone — widely expected to ship around the same time.

    The latest discovery, via The Boy Genius Report: controls for a digital compass.

    The first hints that Apple might be planning to add a magnetometer to the next-generation iPhone were reported in April by MacRumors. But this evidence is a lot stronger: a pair of screen shots with toggle switches for “Show in Compass” and “Log Compass.”

    What could you do with a compass-equipped iPhone? MacRumors offered several suggestions last April, including a couple prototype “augmented reality” games that combined real-world backgrounds with computer-generated characters.

    But the killer app may be the one that was featured so prominently at the unveiling last September of HTC’s G1, the first mobile phone to run on Google’s (GOOG) Android operating system. The highlight of the press conference was the demo of a G1 running Google Maps Street View in Compass Mode.

    Street View, which didn’t appear on the iPhone for another two months, allows you to scroll through thousands of 360-degree panoramic street-level photographs of locations in the United States, Europe, Australia and Japan.

    But the G1, which has had a built-in magnetometer from Day 1, took Street View one step further. Rather than having to drag or click to navigate the images of a particular street corner, you could just swing the phone up, down, left or right. The image on the screen shifted as the phone did, creating an effect not unlike the one you would get through a built-in camera if you were actually standing on that street corner, rather than just visiting it in cyberspace. YouTube video of an early demo is pasted below the fold.

    It’s pretty cool. It’s been available on the G1 since that phone’s October 2008 release. If the hints and rumors prove true, it could come to the iPhone this summer.