Apple in its Press Release today has made it clear that they are not tracking user locations, atleast not intentionally and has promised that a fix will be released for iOS to address this issue. The new update for iOS that will probably be called iOS 4.3.3 will delete the currently stored location data on iPhones and will entirely turn off the location services when they are turned off from the settings.app.

Software Update
Sometime in the next few weeks Apple will release a free iOS software update that:

  • reduces the size of the crowd-sourced Wi-Fi hotspot and cell tower database cached on the iPhone,
  • ceases backing up this cache, and
  • deletes this cache entirely when Location Services is turned off.

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