Magnetometer Supplier Found in 3.0 Firmware
According to an AppleInsider report
some folks have dug up information in the iPhone 3.0 beta firmware indicating that Japan's Asahi Kasei will provide the magnetometer
hardware for the next generation iPhone due to be announced in June
(?) and on sale July 17th
A directory labeled "compass" was found within the iPhone 3.0 firmware file. Within these files there is some information identifying specific details for the magnetometer. "The files identify Asahi Kasei's azimuth sensor No. AK8973, a 16-pin leadless IC package measuring 4mm square and 0.7mm thick, as the chip that will help future iPhone users determine their direction. It bundles a master clock oscillator."
A magnetometer, more widely knows as a compass, will allow the iPhone to know what direction it is pointing in addition to it's current abilities to detect tilt via the accelerometer and direction via the GPS.
There are plenty of uses for the a magnetometer in the iPhone. One of the more interesting theories
is that this magnetometer will be utilized by Apple to creatively tell you information about your surroundings via iPhone. If true one will be able to simply take a picture of a building and the iPhone will pull up all information about it using a combination of magnetometer and GPS data and sources like Wikipedia. A more standard uses would be providing turn by turn direction software with better data -- the current GPS takes a few seconds to realize you've turned.