Smartphone tracking - A privacy issue?

A story broke yesterday about the Apple inserting a hidden program in iPhone 4 and iPad 3G models that periodically tracks ad records in a hidden file the physical location of the device.  Triangulating from cell towers and local WiFi systems, the program calculates geographic position and records in an unecrypted file (that apparently also is downloaded to computer drives whenever the device is synched.  What remained unclear was whether Apple also had access to the file and its information.
This comes on the heels of last month's assertion that Pandora and other smartphone apps were collecting similar information on users, locations, and behaviors and marketing that information to others.  It's one thing for the company providing a service to use such information for its own purposes - say to improve its recommendations, or to make us of location-based advertising, and something quite different to divulge that information to others without explicit consent of users.
The rising concern about privacy and the collection, use, and dissemination, of user behavior and location data is reflected in a recent Nielsen study that reported that most people who had smartphones and had used apps expressed concerns about mobile privacy (59% of women, 52% of men, and 63% of seniors (55 or older)).  On the other hand, there was somewhat less concern about apps using such information to target information to users, or to people within a general geographic area.  A large and growing segment seem willing to have such information used, if they in turn see some benefit for themselves.
The main "privacy" issue actually seems to be one of transparency and control - if users fell they can control the conditions under which personal information is collected and used, then they are not as concerned.  What worries most is the potential that such information will be collected and widely disseminated without their knowledge or consent (and that means not hiding the info away in the fine print of the license/service agreement).
Apple's problem is that they didn't offer this as a service and benefit that users could opt in to utilize, but in seeming hiding things.

Source: "Most Smartphone Users Are Concerned About Piracy," Online Media Daily