AppleInsider has published a report which points towards Japanese manufacturer Asahi Kasei as the provider of the digital compass (magnetometer) in the next generation iPhone.
The source of the information is "people familiar" with recent iPhone OS 3.0 betas.
People familiar with betas of the iPhone 3.0 software developers kit recently dug up several header files attributed to the Japanese manufacturer in a directory appropriately labeled "compass." More specifically, the files identify Asahi Kasei's azimuth sensor No. AK8973, a 16-pin leadless IC package measuring 4mm square and 0.7mm thick, as the chip that will help future iPhone users determine their direction. It bundles a master clock oscillator.
A digital compass would give the iPhone the ability to sense directional movements, for example the iPhone would be aware of which direction it is facing in Google Maps.