SAN FRANCISCO (Reuters) - Google Inc is adding Garmin Ltd and TomTom to its growing list of rivals as the Internet search giant weaves technology for driving directions into new versions of its smartphone software.

Google said its new Google Maps Navigation product will provide real-time, turn-by-turn directions directly within cell phones that are based on the new version of its Android software.

The navigation product, which features speech recognition and a visual display that incorporates Google's online archive of street photographs, marks the latest step by Google to challenge Apple Inc's iPhone and Microsoft Corp's Windows Mobile software with its Android smartphone software.

It also represents a direct competitive threat to companies like Garmin and TomTom which sell specialized hardware navigation devices. TomTom also makes a software navigation app for the iPhone that sells for $99.99 in the U.S.

Google executives told reporters at a press briefing on Tuesday ahead of the announcement that the company decided to offer turn-by-turn driving directions in its four-year-old maps product because it was the most requested feature by users.

CEO Eric Schmidt said that expanding into a new market with new competitors was not a part of Google's motivation.

"Those are tactical problems that occur after the strategic goal which is to offer something which is sort of magical on mobile devices using the cloud," Schmidt said.

The new navigation service will work with Google's forthcoming Android 2.0 software, the next version of the smartphone operating system developed by Google. The company announced development tools for Android 2.0 on Tuesday, but a spokeswoman said specific details about when Android 2.0 will be available should be directed to phone-makers and wireless carriers.

Google said the product, which will initially be limited to driving directions in the U.S., will be free for consumers.

Executives said the company was not currently serving ads on the navigation product, though they said Google is constantly looking at innovative ways to advertise in Google maps.

Google Engineering Vice President Vic Gundotra said the company hoped to eventually make versions of the navigation product for non-Android smartphones, but noted that the software has "stringent" hardware requirements.

He would not comment on whether Apple's iPhone, which offers Google mapping software as part of its standard menu of built-in applications, would offer the new navigation features. He said, in response to a question, that the latest version of the iPhone, the iPhone 3GS, has the horsepower to support the navigation product.

The new navigation product taps into various existing Google products and technology, including Google's flagship Internet search capability to find the addresses for a particular destination, as well as Google satellite images and Google Street View, for more realistic views of a route.

The product also uses voice-recognition technology, making it well-suited for use while driving, Google said. And the navigation software can display live traffic data that Google collects from various sources, including data it collects on the speed and distance that users of Google mobile maps are traveling.

Gundotra said the company does not collect any personally identifiable information in the Google mobile maps and the navigation products. - Reuters