Most Smartphone Users Are Concerned About Privacy

by Mark Walsh, Apr 21, 2011, 8:30 AM

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Privacy has emerged as a major issue in the mobile industry as the ability to track and target consumers by location and other criteria on devices has grown more sophisticated and extensive. That was underscored yesterday when it was discovered that the iPhone 4 and iPad 3G store user location data on an unencrypted file, making it potentially available to anyone who gains access to the device.

Earlier this month, it was revealed that federal prosecutors are investigating whether Pandora and other smartphone applications are collecting and sharing personal information without authorization. A prior Wall Street Journal investigation and findings from a separate Bucknell University study showed many popular apps send a mobile phone's unique ID number to outside companies without users' knowledge or consent.

Given the heightened scrutiny surrounding mobile privacy, where do consumers stand on the issue? A new Nielsen survey suggests many people are still wary of sharing location data, despite the popularity of check-in services and the prevalence of GPS-enabled devices. This reticence is especially pronounced among women, 59% of whom have privacy concerns compared to 52% of men. (The Nielsen research focused on smartphone owners who had downloaded an app in the last 30 days.)

Not surprisingly, younger mobile users who are more accustomed to sharing personal information through digital channels tend to worry less than older ones. So half of smartphone users ages 25 to 34 expressed privacy concerns, compared to 63% of those 55 and over. But across all age groups, at least 50% had concerns about using location-based services.

"As consumers become increasingly familiar with location-based apps, and as marketers earn their trust and become more savvy about understanding what benefits consumers expect in exchange for that information, consumers will become more comfortable with the idea of location-based mobile applications," stated a Nielsen blog post Thursday on the topic.

But that can work in reverse as well, when app developers, advertisers and key smartphone players like Apple and Google lose consumers' trust by collecting and distributing user data without proper disclosure or approval. So far, they haven't done much to gain that trust. Perhaps that's why federal authorities have taken a keen interest in looking into mobile data privacy, and digital privacy more broadly.

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