The reasons may not be nefarious, but part of a larger plan to "tap the $2.9 billion market for location-based services," according to the Wall Street Journal. Without knowing your device location, many of those services, including discounts or coupons for shopping or restaurants could not be used.
Although Apple and Google have yet to speak publicly about the data mining, Apple said in a July 12th letter to Congress that the locations are used to structure ads.
At some level, people have to know that a smartphone or a feature phone can be tracked. If anyone uses a map application or GPS, someone knows literally where you are. The same goes for people who use Foursquare, shopping or other applications that rely on location. That's kind of the deal we silently made when we decided to inhale the latest or newest technology without questioning why we needed it or what others might do with the information.
The only problem some foresee is that much of this information is easy to find and is unencrypted. While many say you need a court order to get access to phone records, Michigan State Police have bypassed that with new forensic cellphone analyzers. The devices extract data from cellphones as a routine police procedure, the American Civil Liberties Union alleges. If so, the procedure could mean a violation of the 4th Amendment (illegal search and seizure) provided the U.S. Supreme Court agrees.
The danger is that by this information being out there and easy to find, it's found by almost everyone who wants to know your whereabouts. That means retailers, advertisers, law enforcement, the government and anyone who probably pays for that knowledge. So think about that, as you use any of your location-based applications.