Lets start with understanding few basic terms -
1. GPS : Global Positioning System - (Source: Wikipedia) The Global Positioning System (GPS) is a space-based satellite navigation system that provides location and time information in all weather, anywhere on or near the Earth, where there is an unobstructed line of sight to four or more GPS satellites. It is maintained by the United States government and is freely accessible to anyone with a GPS receiver.
2. GPS Reciever : This is also known as GPS unit, is a a gadget which allows you to acurately pinpoint your position, its job is to locate 4 or more satellites. Using the mathematical principle - trilateration - it can find out its own location anywhere on the earth.
3. GPRS - General Packet Radio Service : This is a packet oriented mobile data service on the 2G and 3G cellular communication system's global system for mobile communications (GSM). You know this as Internet Data Connection on your mobile, and use it for browsing internet, checking emails, downloading softwares / songs on your mobile device.
Devices supporting GPRS are divided into three classes:
3.1 GPRS Class A device: Can be connected to GPRS service and GSM service (voice, SMS), using both at the same time.
3.2 GPRS Class B device: Can be connected to GPRS service and GSM service (voice, SMS), but using only one or the other at a given time. During GSM service (voice call or SMS), GPRS service is suspended, and then resumed automatically after the GSM service (voice call or SMS) has concluded. Most GPRS mobile devices are Class B.
3.3 GPRS Class C device: Are connected to either GPRS service or GSM service (voice, SMS). Must be switched manually between one or the other service.
How does GPRS device make connection
A GPRS connection is established by reference to its access point name (APN). The APN defines the services such as wireless application protocol (WAP) access, short message service (SMS), multimedia messaging service (MMS), and for Internet communication services such as email and World Wide Web access.
In order to set up a GPRS connection for a wireless modem, a user must specify an APN, optionally a user name and password, and very rarely an IP address, all provided by the network operator.
GPS + GPRS = Unit deployed in your vehicle for real time tracking
A GPS reciever and the GPRS hardware sit side by side in the same box ( normally referred as : GPS tracking Unit ), powered by same battery source. At regular intervals or predefined events, the unit sends the GPS data using the GPRS connectivity to the central server ( referred as : GPS tracking Server )
The basics are clear, in nutshell - A unit that has both GPS reciever and GPRS hardware module interfacing together forms the GPS tracking unit. Once this unit is installed inside your vehicle, the self locations reported by the unit indicates the location of the vehicle. All the data that is send to the tracking server is then presented to the user on the maps / reports.