"The iPhone continues to store location data even when location services are disabled, contrary to Apple’s previous claims.
The Wall Street Journal did independent testing on an iPhone and found that even after turning off location services, the device was still collecting information on nearby cell towers and Wi-Fi access points.
This discovery challenges some of Apple’s claims. As Wired.com reported last week, the company explained in a detailed letter last year that it deliberately collects geodata to store in a comprehensive location database to improve location services. In the letter, Apple noted that customers can disable location-data collection by turning off Location Services in the settings menu.
“If customers toggle the switch to ‘Off,’ they may not use location-based services, and no location-based information will be collected,” Apple said in the letter (.pdf).
That doesn’t appear to be the case from WSJ’s testing, as well as multiple independent reports from customers who had the same results." (More)