SiRF Technology (SIRF), a San Jose, Calif.-based maker of GPS chips, this morning said it was cutting jobs and trying to restructure its business due to softening consumer demand. Already the worst performing tech stock for the year, shares of SiRF nosedived in early trading this morning.

“SiRF experienced greater-than-expected softness in product demand from its customers, especially in the PND, or Personal Navigation Devices market,” the company said in a press release.

SiRF is the canary in the GPS coal mine. In other words, the GPS device market has hit the skids and we should expect more bad news, and more dominoes to tumble. Why? Look at SiRF’s customers: Tom Tom, Magellan, NAVIGON, Sony and European white-label GPS maker, Binatone. If the macroeconomic trends are putting a damper on SiRF and its chip-buying posse, it isn’t hard to extrapolate and see trouble for Garmin as well.

Looking further out onto the horizon, I think the standalone GPS device market is going to get cannibalized by mobile phones, which are getting increasingly sophisticated when it comes to personal navigation functionality. GPS devices were among the hottest-selling consumer items this past holiday season, with sales up 214 percent and revenues up 488 percent, respectively, year-over-year.

Location-based services (LBS) are one of our favorite topics here at GigaOM. We have covered the business extensively, including the recent mega-billion-dollar acquisitions made by Nokia (NOK) and Tom Tom. In other deals, Google (GOOG) bought Jaiku and last week, Platial acquired Frappr. All of this activity indicates that “location” is becoming increasingly important in the mobile world.

Folks at the most excellent Maperture blog have put together a list of deals that encompass location-based and mapping services. We took their deal information and put it in a graph to show you, at a glance, just how important location really is.

A short list of LBS start-ups.