When will we see the battle of the location-based services really come to a head? Will it be when Facebook finally comes out with its much anticipated entry into the LBS market? Or will it happen with Foursquare inking deals with major search engines? Perhaps it will happen when GPS technology becomes nearly ubiquitous among cell phone owners – a time that may be nearer than you think.

A release by analyst firm iSuppli says that four out of five cell phones will integrate GPS technology by the end of 2011, with the adoption of smartphones leading the march.

In the first quarter of 2009, 56% of phones incorporated GPS, meaning just under 200 million phones. By the end of 2011, iSuppli predicts that this number will increase to nearly 320 million GPS-enabled phones, coming in at just a hair under 80% of all cell phones.

As a result of this massive adoption of GPS-enabled phones, iSuppli also predicts the slow death of “Portable Navigation Devices”, with smartphones exceeding PNDs in that realm by 2014. On this point, we would venture that we wouldn’t be surprised if this happened sooner than that, even.

Dr. Jagdish Rebello, a principal analyst for iSuppli quoted in the release, says that “social networking services and applications spurred by GPS-related features are critical elements in the smart phone market today.”

“This is illustrated by Google Inc.’s decision to make turn-by-turn navigation, LBS and mobile ads the central features in its bid to take on Apple in the smart phone market, and make up the central pillars of its strategy to increasingly monetize mobile search,” Rebello says in the release.

Beyond smartphones, iSuppli also predicts that 18% of laptops and 42% of portable handheld video games will have integrated GPS by 2014.

mike melanson