[UPDATE: According to a statement from Apple to AllThingsD, Apple stopped supporting Carrier IQ with iOS 5.0 for most devices:
“We stopped supporting Carrier IQ with iOS 5 in most of our products and will remove it completely in a future software update. With any diagnostic data sent to Apple, customers must actively opt-in to share this information, and if they do, the data is sent in an anonymous and encrypted form and does not include any personal information. We never recorded keystrokes, messages or any other personal information for diagnostic data and have no plans to ever do so.”
However, the iPhone 4 still makes use of Carrier IQ.
When begs the question ... what's collecting all the information on the iPhone? Is this a mechanism developed by Apple for Apple?]
Bit shocked that your iPhone has that Carrier IQ logging feature built into the OS? You can switch it off ... in fact, I've shown you how to do this before!
Buried in the Settings menu is an option to choose not to send what Apple calls 'diagnostic and usage data.' This option is buried real deep:
Settings > General > About > Diagnostics & Usage
Here's the screen you're looking for:
Set this to Don’t Send and you can stop worrying about where your data is going and who's looking at it.
Note that this feature is only present on handsets running iOS 5.0 or later (so the iPhone 4S and upgraded iPhone 4 and 3GS handsets.
Image credit: Mike_fleming