GigaOM has published an interesting read about how Apple’s iPhone has driven demand for location-based services. The rise of these services was inevitable, but now there need to be recognized, accepted practices about what they can and can’t do.

A few years ago, I changed a setting on my Nokia to avoid commercial SMS messages. I did that as a precaution after I read a magazine article about how my local Starbucks could send me a coupon as I passed by on the street. That never came to be, but it’s looking more probable now.

Many of my friends have iPhones, and I was compelled to install the location-aware social networking app Loopt after a friend told about how great it was over the holidays. It’s still installed onto my phone, but I’m glad that it only updates itself when I invoke the application and want my location to be known. The AroundMe application can be useful for locating local points of interests, and again, it is not evasive.

However, it’s only a matter of time until application makers begin to get more creative with their terms of use. The possibility of an advertisement-subsidized phones also exists.

It might be my imagination running wild, but picture walking by an electronic billboard that upon detecting your presence, notes that you ate five Papa John’s pizzas last week to all passers by. (Note: When I told Harry I was working on this post, he told me that he was spammed via Bluetooth by a Land Rover billboard in Times Square back in 2006.) Or, an inbox full of solicitations appearing after walking through a busy marketplace.

Worse still, tech-savvy criminals could crack the data stream of location aware application to target users above a certain income level. That might sound far fetched, but is information that these services send up into the cloud even encrypted?

Customer feedback (and distaste) for services that sap away privacy might be enough, but I feel that stakeholders including advertisers and phone makers need appropriate guidelines before there is misuse.

 
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