The article points to a bit of legalese which says that 'in order to provide location services, apple and their partners and licensees' etc.
In other words 'Some apps or Apple services (e.g. MobileMe) may have to figure out where you are and send that somewhere'. This should be a no-brainer.
As one commenter said, it's just scaremongering for pageviews.
This is one thing the Palm Pre got right. When you first turn on your phone, it asks if you'd like to always allow location info, or if you'd like the phone to ask each time. If you say no, any app (even the pre-installed ones) must ask every time it wants to get your current location. If you say yes, it gets out of your way and doesn't bug you unless you change it in the settings.
Of course, if you say yes, it also periodically sends data behind the scenes. Strange, but it's better than making this completely uncontrollable.
From what I understand, the article is about the fact that Apple may be keeping track of the devices' position at all times, as part of the OS basically.
The prompt that asks you every time if you want to give your location is for when you're using apps.
On an island in the middle of nowhere, my iPad (without cellular or gps) knows its precise location. No google van or wifi mapping car could have come within a mile of the wifi access point which is only on sporadically.
I presume my brother's iPhone 3gs correlated the wifi access point and his coordinates for someone when we opened the cabin this spring. This may be an "after the fact" license update.
Suggesting that Apple silently correlates and feeds back iPhone GPS data to Skyhook's access point database is speculative, at best. Occam's razor says Skyhook is using off-the-shelf hardware to identify access points at a distance, especially if your island in the middle of nowhere affords clear line of sight.
Your wifi only being on sporadically isn't dispositive either. I took an Airport Express to a hotel once for a two-day conference, and for months afterward my iPhone thought my apartment in Seattle was in downtown San Diego.
Your Occam's razor has access to a pretty nifty shelf.
I don't think you are going to find off the shelf gear to receive an Airport express through 12 inches of log, then across 1 mile of water with the surface of the water in the fresnel zone, I'm only about 10 feet above water level and the nearest land road is about 20 feet above water level. (The multiple paths from reflections off the lake create all sorts of cancellation problems.)
Even more unlikely, if they could sense my access point, they would still have to work out a vector and range to me since the nearest roads the other way are over the horizon. The road does not afford a sweep for meaningful triangulation. We are firmly in "zoom and enhance" territory now.
It doesn't have to be Apple sending data to Skyhook. I suppose any app with access to the location data and MAC address could do it. Or maybe Skyhook sent out a boat. Or perhaps someone manually sent the AP coordinates to skyhook.
Does that opt-out have to do with location though? The info page doesn't mention this when it explains how iAds will tailor advertisements to users. It does say "Apple and its partners use cookies and other technologies in mobile advertising services." Are you implying that 'other technologies' could mean geotagging?
This strikes me as a sketchy use of "opt-out": why would anyone actually want this? They're clearly hoping that most people either don't find out, or are too lazy to bother.
i think it's because many people think apple actually has some sense of concern for its users privacy and security, unlike some of those other companies.
In other words 'Some apps or Apple services (e.g. MobileMe) may have to figure out where you are and send that somewhere'. This should be a no-brainer.
As one commenter said, it's just scaremongering for pageviews.