Recently, Apple product releases such as iPad 2 and the white iPhone 4 have been overshadowed in the news with negative leaning press surrounding the iOS device location tracking issue. For those unfamiliar with the controversy that began last week, here’s a synopsis: Essentially a small file containing nearly a year’s worth of location data was discovered within the backup files of iOS devices such as the iPhone and 3G-equipped iPad.

This data, when plotted, yields incredibly accurate results showing the device’s travels. This means if you keep your iPhone on your person, your movements have effectively been tracked for up to a year. Purportedly an invasion of personal information, privacy concerns were immediately raised. Misunderstanding and speculation of Apple’s involvement and usage of collected data initially gave way to moderate panic in some users. In the days following the discovery, Apple was largely silent on the issue. Save for a characteristically blunt email exchange between Steve Jobs and a concerned user, the company refrained from issuing an official statement on the findings.

Last Wednesday, however, Steve Jobs, Phil Schiller and Scott Forstall agreed to a telephone interview conducted by All Things Digital. During the interview, Jobs explained the company’s initial silence, claiming it was due to Apple throughly researching the issue to best deliver the facts to its customers. Jobs explained:

“We’re an engineering-driven company, When people accuse us of things, the first thing we want to do is find out the truth. That took a certain amount of time to track all of these things down. And the accusations were coming day-by-day. By the time we had figured this all out, it took a few days. Then writing it up and trying to make it intelligible when this is a very high-tech topic took a few days. And here we are less than a week later.”

The interview continued with further contributions from Jobs, Schiller and Forstall on how Apple deals with privacy—specifically location-based apps, whether or not Apple plans to testify before Congress on the issue, what Apple uses the acquired information for, and how the company’s privacy and security policies differ from its competitors. An edited transcript of the interview can be found here.

Sensing the growing controversy surrounding the issue, Apple published an official Q&A style document to its PR library detailing the facts of the situation. Although Apple claims the information is merely for maintaining a database of Wi-Fi hotspots and cell towers around a user’s current location, and that any collected data is anonymous ad encrypted, it will be formally addressing the issue with a future software update.

Scheduled for release in the next few weeks, Apple plans to issue a free iOS update which will perform the following:

  • Reduce the size of the crowd-sourced Wi-Fi hotspot and cell tower database cached on the iPhone.
  • Cease backing up this cache when synced with a computer.
  • Delete the cache entirely when Location Services is turned off.

While this news doesn’t exactly have people fitting their tin foil hats and smashing their iPhones, it is always a bit disconcerting to know big brother Steve is watching. As with the iPhone 4 antenna controversy last summer, we feel that by taking its time and formulating an accurate and concise response, Apple has handled this issue to the best of its ability. What are your thoughts on the issue? Is privacy something that should be traded in exchange for the technology we enjoy—and in many cases rely on? Feel free to share your thoughts on the blog.