April 26th, 2011

Phone Data Used to Fill Digital Map

The New York Times

You may not know it, but if you carry a smartphone in your pocket, you are probably doing unpaid work for Apple or Google — and helping them eventually aim more advertising directly at you.

As those two companies battle for dominance in mobile computing, they have increasingly been using their customers’ phones as sensors to collect data about nearby cell towers and Wi-Fi hot spots.

Google and Apple use this data to improve the accuracy of everything on the phone that uses location. That includes maps and navigation services, but also advertising aimed at people in a particular spot — a potentially huge business that is just getting off the ground. In fact, the information has become so valuable that the companies have been willing to push the envelope on privacy to collect it.

“Google envisions a world where even a small business can promote products to consumers nearby on a mobile device,” said Alistair Goodman, chief executive of Placecast, a location-based advertising company here. “That is a massive market.”

The companies are using the cell tower and hot spot data to build maps of the world, maps that help smartphones quickly pinpoint their locations. Using the signals as navigational beacons is particularly useful in places where GPS satellite signals are weak, like urban areas or anywhere indoors.

Shifting allegiances and legal battles in the world of location services suggest competition in this market is heating up.

Apple initially relied on technology from Skyhook Wireless, a company that was a pioneer in the technique of using Wi-Fi hot spots for location. But last year it began collecting its own data as well. And late last year, Skyhook sued Google, charging that Google had copied its technology and persuaded Motorola to break contracts with Skyhook and use Google’s competing service.

Google and Apple have said that they collect the information anonymously and use it to keep their databases of Wi-Fi hot spots up to date, not to track individuals. But because a person’s location is delicate information, the practices have raised privacy fears.

The use of this data by the companies has been under scrutiny since last week, when two technology researchers reported that a file stored on many iPhones and iPads keeps track of all the locations visited by a user. The file is unencrypted and is copied to people’s personal computers when they sync their devices.

The report prompted lawmakers in the United States to ask Apple for explanations. Several European governments said they would open investigations into Apple’s practices. On Monday, two customers sued Apple accusing it of privacy invasion and computer fraud. They contend the company is secretly recording and storing the location and movement of iPhone and iPad users.

Late last week, Google said it was collecting information about nearby networks from Android users, though it said that it was not tracking individuals and that it allowed users to decline to participate.

Read more: http://www.nytimes.com/2011/04/26/technology/26locate.html?_r=1&ref=business

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