Theoretically, someone could steal your phone, hack it, and get access to this data. This could potentially show them where you were up until the point they stole your phone. (Of course, given that they stole/found your phone, they would probably already know that.)
But wait. If they stole/found your phone, couldnt they also have access to information like your address, the addresses of friends/family, all your phone numbers, perhaps some passwords, maybe monetary information? Yes, but thats not as sexy of a story.
Oh, and if your phone had any app like Foursquare, Gowalla, Loopt, etc, they could just open those apps and get all your actual location information without hacking the device? Yep, but again, Apple has nefarious intent here, remember?
....
What Apple is actually doing is collecting data points to build up their own location database, as Erick explained last week. Why? Because as we first reported last year, in April 2010, Apple made the move to ditch former partners Skyhook Wireless and Google, who were previously supplying them with such a database information necessary for all location services on the phone.
And guess how those guys built-up and updated those databases? The same way (though as Apple briefly mentioned today, each company that collects such information has different methods for doing so). Previously, the iPhone was sending this same type of information to Skyhook. Now theyve taken full control of that information. Apple likes to be in control of its own products. This should be absolutely no surprise.
....
So instead your mobile device is used to anonymously record, encrypt and send this cell tower and WiFi hotspot data to Apple. The keywords anonymously and encrypt are paramount here, yet both have been downplayed in nearly every story on the issue. Apple has no clue who you are based on this data. They have no way to know that. And they have no reason to want to know that. And anyone trying to snatch this data out of the sky would not be able to read it.
....
Apple SVP Scott Forstall explains the log length mistake (and thats exactly what Apple is claiming it is and there doesnt appear to be a reason to believe otherwise) pretty well in an interview with Mobilizeds Ina Fried:
We picked a size, around 2MB, which is less than half a song. It turns out it was fairly large and could hold items for a long time.