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Because most people buy or have cellphones already. It's a device that everyone carries around, so why not also have it be the best, or at least a very good, GPS unit. This kind of takes away a big reason to buy a standalone GPS player. All mobile devices like this are converging in on the one device everyone owns. So you dont need an MP3 player, and a Camera, and a GPS, and a PMP, and a phone.
Convergence killed the GPS stars :)