The same way that the Yellow Pages used to make a lot of money for the phone companies even though they were given out for free--advertising.
Why are they offering free GPS maps on these phones? So they can show advertiser locations on the map--a veritable gold mine. And that is just one application.
They thought they could do this with the iPhone, then realized that Apple had too tight control of the experience for them to be able to deploy all of the types of applications that they wanted (and that would make them money), so they came out with their own phone infrastructure, and offered it to the market for free.
Nope, Eric Ericsson is indeed real. I've shook his hand. You can also see him speak here:
http://www.telecoms.com/20644/...