How does external GPS device work with iPhone and iPad?
Per specs, only iPads with cellular modems have GPS hardware built in—where by definition all iPhones will have it.
There's a discussion thread in Apple communities that appears well-sourced with a few links to more information.
Speaking from experience, full-fledged GPS in an iOS device WILL drain battery quite quickly—due to the need for satellite tracking. That can be an unwelcome surprise in the wilderness—and something dedicated GPS devices may be better suited for.
Another example is aviation-use iPads in the cockpit for management/flight planning, where external GPS devices run the risk of interfering with the aircraft's installed GPS transceivers.