Apple sent out a message to all the iPhone apps developers through its Developer Connection blog. To protect the user experience of its consumers, Apple has announced that it would return the app from the app store if it uses location based information to helps mobile marketers for target marketing. Though it encourages developers to use the core location framework but it should only be used for information such as local whether, finding a restaurant or locating an ATM.
Source: iPhone Buzz
If you build your application with features based on a user’s location, make sure these features provide beneficial information. 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.
Mobile advertising has been growing well and mobile advertising industry is said to grow at a very fast rate this year. This restriction from Apple could be a huge blow to the mobile advertisers as Apple constitutes a large section of mobiles owned in US.