The first true turn-by-turn navigation application for Apple’s (AAPL) iPhone has finally been released and it comes from none other than the official U.S. carrier of the popular smartphone: AT&T (T).

While Google (GOOG) Maps has been a feature since the first iPhones came out, providing basic directions using Google’s powerful map, it isn’t really capable of providing the same experience, accuracy, and ease of use as most stand-alone GPS devices.  AT&T Navigator, powered by TeleNav bridges this gap, providing audio directions, a 3D visual map interface, speech-recognition, and automatic re-routing if the user drives off-course, albeit for a monthly fee.

While competing navigation options for iPhone are expected from Tom-Tom and Navigon, TeleNav and AT&T beat them to the punch in putting out the first turn-by-turn navigation app.

The software itself, for the iPhone 3G and 3GS, is free to download and won’t take up too much space as the map data is downloaded on the fly from the Internet.  However, users need to pay $9.99 a month to use it.

Compare that to standalone devices, which typically start at $100, but have no monthly fees for use.

The Pros

The software, which is always connected to the Internet, actually incorporates live traffic information when it’s routing you through your trip.  It will find you the quickest way to get where you need to go instead of the most direct (which we all know can often have cars crawling at 2 miles per hour!).

Unlike a lot of other devices, AT&T Navigator’s audio voice will actually say the names of the streets and highways it tells you to turn onto.  So instead of just saying, “next left,” it will tell you “make next left onto third avenue.”

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The software is pretty intuitive to use and appealing to the eye, especially the moving 3D map, which can be switched to a 2D map if desired.  And the search feature is very powerful, being connected to the Internet.  Oftentimes standalone GPS devices do not have the most up-to-date information on points of interest and locations, which can be problematic if the place a user is looking for is relatively new.

The Cons

While testing out the device, there were a few occasions when it misinterpreted a turn onto an exit ramp on the highway as going off-course and it tried to reroute the trip.  But after merging onto the next highway, the device rerouted again and was back on the original route.  So while this was annoying, it didn’t prevent it from functioning.

Battery life is a big drawback with this software, as it tends to drain the power from the iPhone pretty quickly.  So a car power adapter for your iPhone is a must if you’re using this software.

Finally, the software’s voice was somewhat garbled during usage, which is obviously problematic when you’re depending on it to get you where you need to go.  Even with the music down in the car during testing, it was difficult at times to hear the directions.  This could be a limitation in the iPhone’s speaker itself, however.

The Verdict

For the first true turn-by-turn navigation app for the iPhone, this is a great start.  AT&T Navigator certainly gets the job done and offers some Internet-enabled features that standalone GPS units simply cannot match.  However, the audio quality leaves some room for improvement.  We’ll see if AT&T and Telenav address this in future product updates and, of course, there are high expectations for upcoming apps from companies like Tom-Tom that could offer some advantages over this app when they’re released.