Do you know what information is being sent through the air from your phone? According to research doen by Lookout Inc, a quarter of free iPhone apps, and half of free Android apps contain code that deliberately collects sensitive information from users. Unfortunately Apple's review process, and of course Google's lack of one, have not yet been effective in combating this potentially serious problem.
iPhone tells users when an app wants to see location information about a user, while Android has a pretty detailed list of warnings that users will see when they try to download an application. The problem, however, is that regardless of requested permissions, users generally choose to use an application anyway.
When asked for comment, Google said it "tries to limit users' risk with the warnings but consistently advises users to only install apps they trust". Apple had no comment.
When there is a problem, like users' privacy being at risk, creative solutions tend to crop up. It will be interesting to see what those solutions are, and who they will come from.