AT&T’s upcoming version of the BlackBerry 8820 smartphone will be deliberately stripped of its full GPS features for the sake of promoting the iPhone, according to a report from an insider within the cellphone carrier. Although Research in Motion’s handset would technically be capable of supporting any compatible GPS software, AT&T has reportedly forced the cellphone maker to limit its mapping on AT&T to the subscription TeleNav service in an attempt to make the iPhone’s Google Maps feature and the device as a whole more appealing to customers. The carrier allegedly threatened to drop BlackBerries entirely from its network when RIM protested the limitation, according to the source.

The purported insider would not pinpoint whether the feature block was an attempt by Apple to downplay the features of iPhone competitors or an AT&T maneuver to strengthen its multi-year agreement with Apple. However, the move would be unusual for the carrier as it typically encourages the adoption of BlackBerry phones for business customers and only sees a small amount of income from TeleNav’s service, which is available at $6 per month for GPS use during ten trips and $10 for unlimited trips. The 8820 includes no camera and is generally considered at odds with Apple’s phone, which focuses largely on media playback and other personal uses.

AT&T is set to launch the BlackBerry 8820 during September and will also be challenged by a version soon afterwards from its immediate rival T-Mobile, which is said to be shipping RIM’s device without the same GPS limitation. Pricing is unknown but should be comparable to the current 8800, which sells for $300 with a two-year contract versus the $500 of Apple’s 4GB iPhone.

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