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You can't hide from your smartphone

Jason Topper probably isn't a big fan of location-based services. In Topper's case, Apple's "Find My iPhone" service led LAPD officers directly to the stolen handset in the parolee's pocket after reports of an armed robbery.

Not every smartphone owner will see such extreme results from location-based apps. However, technology experts and privacy advocates have faced off over the implications of a network capable of reporting on the whereabouts of every wireless phone user at any time.

Developers and carriers face pressure to act responsibly, while users themselves publish more of their activities to online streams. Even without location-based technology, some of us tell the world that we are out for a Peet's Coffee run, and no one is at home.

Check-ins let wireless users open their lives

Most smartphone users embraced the first wave of location-based services, consisting of simple maps and driving direction applications. Soon, social networks piggybacked on map applications. Facebook bought popular "check-in" service Gowalla to help streamline its timeline features.

The second wave of location-based services, or LBS apps, aims to connect people with each other, and with marketers. Apps like Mingle aggregate check-ins, suggesting where users might find a quiet coffee shop or a dance club packed with the kind of people they'd like to meet.

Square and Starbucks convert proximity into payments

Meanwhile, advertisers have jumped on the "targeting" bandwagon to lure passers-by into their shops and offices. Public transit riders in test cities who opened their favorite casual games saw online ads that directed them to nearby bus shelter ads, offering related discount coupons.

The ads use "geofencing" technology, software that changes functionality when users enter a targeted space. Geofencing apps enable payment tools in Starbucks' coffee shops. When retailers sign up to accept payments using startup company Square, their customers can settle tabs virtually while in the same room as the register.

Permission-based apps transmit data in the background

The latest LBS applications keep running even when smartphone users aren't looking at their screens. Google and Apple both offer features that publish real-time location information to curious family and friends. Meanwhile, the Highlight app alerts its members when their targets wander into close proximity of each other.

When Loopt first hit the market, the app enabled users to leave "tips" for each other, tagged to locations. Retail kiosk operator and debit card issuer Green Dot bought Loopt in 2012, amid speculation that the new owners would supplement user-generated reviews with sponsored offers.

In all those cases, users must opt-in to terms and conditions that permit service providers to publish their personal information. However, retailers and advertisers have staked out claims on tracking wireless phone users without their knowledge.

Wireless tools could track shoppers without permission

Every wireless device transmits a unique identifier. Cell towers use that code to route calls and data to the right receivers. With enough computing power, marketers can trace and track those codes.

One privacy debate centered on a plan by malls to monitor shoppers' movements on Black Friday. Even though malls already use cameras and researchers to follow shoppers around, critics like Senator Chuck Schumer railed at the potential misuse of tracking data. Mall operators assured shoppers that it would anonymize their data. Schumer maintained the position that the retailers couldn't guarantee privacy and that telling customers to shut their phones off wasn't an acceptable option. The malls cancelled their plans to track shoppers.

Schumer's concerns may not have been misplaced. As an example of a privacy glitch, Path's social networking app copied users' entire address books to remote data centers. Questions remain about what could happen to data collected with good intentions.

Information overload and power usage could hamper adoption

Consumers who don't share privacy fears could still find reasons to disable location-based services. An application like Highlight requires "always-on" access to both data and GPS services that can deplete a phone's battery life much more quickly than normal use. Even if manufacturers can bridge the gap between power storage and user expectations, consumers may still not have the capacity to absorb every message that location-based services hurl their way.

Google's Project Glass integrates the search company's maps, messaging and search platforms into a unified, heads-up display. Critics of the project remixed the Project Glass launch video to demonstrate what the user experience might look like if advertisers gained a foothold on the system. The clip envisions a version of Google's augmented reality service recommending advertisers' walking shoes when a Manhattanite discovers his subway line has been suspended.

Balancing privacy, permission and security

ZDNet blogger James Kendrick dreams about a smartphone application that will automatically detect his presence in a store, apply loyalty program rewards and even facilitate payment for a purchase. In Kendrick's perfect world, his phone will be able to do all three of these things without even leaving his pocket. That vision of the future will require consumers to reconcile their drive for convenience and savings with some hard choices about privacy.