iPhones DO use Google Maps to show traffic congestion... but your idea sounds like a credible thing to do. BUT, I am not sure I want Apple, AT&T, or any body to have the ability to ping my location, direction, and speed because of the GPS built into my phone!
"Not sure?!" What am I saying? I trust Apple far more than I trust AT&T to not provide individual data to anyone... but I STILL DO NOT WANT THEM TO HAVE THIS CAPABILITY!
GPS phones aren't necessary because the cell phone tower positions are known. Your cell phone periodically checks in with nearby cell phone repeaters to say: "Hi, here I am if I get a call", and the repeaters can measure the signal strengths to triangulate. All that's needed is to subtract the time between two repeater check-ins to determine an approximate travel speed and direction. GPS phones though would add the capability of tracking side-street traffic flow.
AT&T could offer this service just with a software change on their central servers. The capital investment would be low and the benefits immense, at least to AT&T subscribers. If everyone had good real-time traffic data though, all travel route options would become about equal.