Google unveiled a free navigation system for mobile phones on Wednesday in a move seen as a potential challenge to the makers of GPS navigation devices.

US telecom carrier Verizon Wireless and US handset maker Motorola announced meanwhile that a new smartphone going on sale in the United States next week, the Droid, would be the first to feature Google Maps Navigation.

The Droid, which will cost 200 dollars after a 100-dollar rebate and is being touted as a challenger to Apple's popular iPhone, is powered by Android 2.0, Google's next-generation mobile phone operating system.

Google Maps Navigation will currently only work on smartphones using Android 2.0.

It includes many of the features of a traditional GPS device made by companies such as Garmin and TomTom such as three-dimensional (3D) views and turn-by-turn voice guidance.

The Internet-connected system allows navigation using voice search in English, provides live traffic data, satellite imagery from Google Maps and Google's "street view" -- real pictures of destinations.

Verizon and Motorola said the Droid, which features a Qwerty keyboard, a five-megapixel camera and DVD-quality video capture and playback, will go on sale in the United States on November 6.

Verizon is the latest US telecom carrier or manufacturer to adopt Google's Android software in a bid to challenge the iPhone and Blackberry from Research in Motion.

Android is already being used to power smartphones from T-Mobile, and US wireless carrier Sprint Nextel and Taiwan's HTC are also releasing a mobile phone powered by Android.

The Wall Street Journal reported this month that US computer maker Dell is teaming with telecom colossus AT&T, exclusive carrier for the iPhone in the United States, to launch an Android-based smartphone next year.

Technology industry tracker Gartner predicts that Android-based smartphones will capture 14 percent of the global market by the year 2012, as compared with a mere two percent today, according to a report in Computerworld.