iPhone data collection

The iPhone continues to store location data even when location services are disabled, contrary to Apple’s previous claims.
The Wall Street Journal did independent testing on an iPhone and found that even after turning off location services, the device was still collecting information on nearby cell towers and Wi-Fi access points.
This discovery challenges some of Apple’s claims. As Wired.com reported last week, the company explained in a detailed letter last year that it deliberately collects geodata to store in a comprehensive location database to improve location services. In the letter, Apple noted that customers can disable location-data collection by turning off Location Services in the settings menu.
“Apple is not harvesting this data from your device,” wrote Levinson. “This is data on the device that you as the customer purchased and unless they can show concrete evidence supporting this claim – network traffic analysis of connections to Apple servers — I rebut this claim in full. Through my research in this field and all traffic analysis I have performed, not once have I seen this data traverse a network.”
So the big question is why is the data there in the first place? According to Levinson, it’s used by the apps on your iPhone and iPad. Apps like Maps, Camera and even Twitter uses location services.
Levinson said the file has been on the iPhone as long as location services has been available. In iOS 4 it just changed location.
“I understand that Mr. Allan and Mr. Warden are valued researchers for O’Reilly, but they have completely missed the boat on this one,” said Levinson. “In the spirit of academia, due diligence is a must to determine who else has done such research. Mr. Allan, Mr. Warden, and O’Reilly have overlooked and failed to cite an entire area of research that has already been done on this subject and claimed full authorship of it.”
You and Your Applications may not collect, use, or disclose to any third party, user or device data without prior user consent, and then only under the following conditions:

• "The collection, use or disclosure is necessary in order to provide a service or function that is directly relevant to the use of the Application. For example, without Apple's prior written consent, You may not use third party analytics software in Your Application to collect and send device data to a third party for aggregation, processing, or analysis.
• "The collection, use or disclosure is for the purpose of serving advertising to Your Application; is provided to an independent advertising service provider whose primary business is serving mobile ads (for example, an advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent); and the disclosure is limited to UDID, user location data, and other data specifically designated by Apple as available for advertising purposes."

The revised developer agreement could pose enormous challenges for mobile advertising networks like AdMob, recently acquired by Apple rival Google for $750 million. The updated language appears to suggest companies like AdMob will be unable to continue sharing advertising analytics data with marketers, significantly undermining the value of its ad services. Independent mobile ad firms like Millennial Media and Greystripe would appear to be unaffected by the license revision, although the agreement suggests they must secure Apple's consent to continue collecting app data.