Yesterday, an app was released that was able to read a file generated by iOS (and backed up to computer with iTunes), that shows where your iPhone or 3G enabled iPad has been since the day you purchased it. The file is called consolidated.db and uses cell tower information to give a guide as to where you have been.
Although there's some obvious privacy questions here, the main questions are why this is allowed to happen, and what exactly does it track? A map of what the consolidated.db file looks like when placed on a map... program available here.
The map shows a fairly accurate representation of where you have been... ie, I have travelled to and from London a few times, along the south cost a little and have been to various areas up north. But, it isn't based on GPS from what I can see and instead, just uses cell towers. The slider at the bottom of the screen can jump to specific days and when I tested days where I knew exactly where I had travelled, the system only tracked me within a mile or 2 at best.
The main worry though is that Apple is collecting this data. From what we understand, the consolidated.db file resides on the iPhone and is often updated. When connecting up to iTunes, a backup is made. That's it from what we understand.
John Gruber at Daring Fireball thinks it is simply a bug or more than likely, an oversight when creating the tracking system. It is believed that iOS uses consolidated.db as place to grab location information for those apps and services that used location based features. This includes the Safari browser, Evernote and a bunch of other apps that all prompt you to be tracked. What should happen, and this is where the oversight is, is that iOS should cull the information regularly so that location is only kept temporarily to service those apps that need it at a given time (and with your permission).
We expect to see iOS be updated in the near future along with a possible update to iTunes so that all the old information can be purged. Even if Apple did have other intentions with the data (not fully sure what), then the public attention the matter has got in the last 24 hours will more than likely see the feature/error put as it should be AKA, a temporary cache.