GPS (Global Positioning System) is a global satellite-based system for determining precise location on Earth.

In a phone, this will allow operators to immediately receive your location when you call the emergency number (911 or 112).

When used with compatible apps and services, and with the user's permission, it can also transmit location information to those apps and services. This is called LBS. For example, a location-enabled phone book service might tell you where the nearest Chinese restaurant is, without requiring manual entry of a zip code, etc.

Most phones with "GPS" in fact use A-GPS technology. The "A" stands for assisted, and means that the phone relies on the network for help in determining location. Although the phone does receive GPS signals directly from the satellites, it can't determine actual location without help from the cell network.