Apple has posted an update to its Core Location services policy, which allows iPhone app developers to access the iPhone's GPS, cell radio, and Wi-Fi systems to determine the current location of the handset.

The change in language is worrisome to developers that are building apps that rely on geo-location. Essentially it is warning them they can employ the technology only if it improves the app - and not just for the sole purpose of being able to better target promotions. (via MacWorld)

"If you build your application with features based on a user's location, make sure these features provide beneficial information," the notice says. "If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user's location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store."

Gaining Momentum

The order comes as geo-targeted ads are gaining momentum - even outside of standard search applications.   BIA/Kelsey reports that geo-targeted display ads are on the cusp of significant growth. This market is expected to grow from $897 million in 2008 to $1.9 billion in 2013, representing a compound annual growth rate of 16%. The prediction also anticipates that the geo-targeted display market will grow from 10.2% of all display ads sold in 2008 to 15% by 2013.

In another survey, Gartner reported that revenue from mobile apps registered $4.2 billion last year - and by 2013 it is expected to reach $29.5 billion. Of that amount, 25% will be coming from advertising in 2013, compared to 5% last year.

Quattro

The move by Apple may say more about its own designs than the market at large. Last month Apple announced plans to acquire ad platform, Quattro Wireless. It is reportedly considering a number of approaches such as taking user data collected through iTunes and the App Store - and marrying that with geo-location technology to create targeted, local advertisements that would be more relevant to consumers.