The rumor has been around for a while that the next version of iPhone will come with a built-in magnetometer that you can use iPhone as a digital compass. A couple days ago, Boy Genius Report reported that they’ve got a few screenshots that showed compass settings from a close source.
Though it’s still a rumor and we do not have any confirmation from Apple, that’ll be interesting we can use iPhone as a compass and probably will spawn up the development of related applications using this new feature.

You may wonder: What can you do with the built-in compass on iPhone? One application that you’ll definitely find interesting is to run Google Map Street View in Compass mode. If you’ve not heard about street view, it allows you to scroll through thousands of 360-degree panoramic street-level photographs (presently available at United States, Europe, Australia and Japan).
Since iPhone 2.2, you can use street view on Google Map and just drag around with your finger to view street photos from different angles. For street view in compass mode, Google tries to take you to a new kind of user experience, that you can navigate through the street photos as you swing the iPhone.
The Street View in compass mode has been available on Google’s Android since last Oct. So, to get an idea of how street view in compass mode works, check out the demonstration video. It’s pretty cool.
If the rumor of magnetometer comes true, we’ll be able to use this application (probably this summer).
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