Can iPhone wifi tethering completely replace built-in 3G for the iPad?

Ever since Verizon announced that their upcoming iPhone 4 would have the capability to act as a wifi hotspot, and since this functionality will in all likelihood be equally added to AT&T iPhones in the near future, I've gotten to thinking about whether built-in 3G is as much of a compelling upgrade for the iPad as it once was. Granted, the process is less seamless - the wifi hotspot needs to be enabled on the iPhone then connected to from the iPad, but unlike the iPhone it's not as though you're going to pull an iPad out of your pocket to quickly check something, so the startup time isn't as important. Also, assuming the price structure stays the same, AT&T charges $20/month extra for 2GB tethering in addition to the $25/month 2GB DataPro plan, which is $5/month less than the 2GB/month iPad data plan. Finally, it's possible to upgrade the iPad without having to pay for built-in 3G again.

However, there is one crucial omission preventing this from becoming the perfect solution: GPS. The 3G iPad, in addition to having access to AT&T's 3G network, also has a built-in GPS chip, something which its wifi-only brethren lack. So while the maps application is perfectly useable over tethering, it won't be able to pinpoint your location accurately; in lieu of a GPS chip, the iPad will attempt to pinpoint your location with nearby wifi networks, which works in densely populated areas but not in more remote areas or while driving.

This is a solvable problem, though, and not just by adding a GPS chip to the wifi iPad. In addition to providing a wifi hotspot, the iPhone could also provide a service on the network to allow connected devices to access location data. This may use even more of your already-taxed battery, but at least it would provide a complete solution.

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