First-order effects

• Independent location startups like Loopt suddenly compete with web-scale incumbents on equal footing inside the App Store, gaining direct access to millions of iPhone users without carrier or desktop intermediaries.
• Developers building around GPS and social discovery get a validated business case almost overnight, accelerating the flow of new apps and investment into the category.

Second-order effects

• Facebook and MySpace are forced to treat the iPhone as a primary battleground rather than an accessory to the web — a dynamic that plays out when Facebook's own location product finally arrives and reshapes the competitive field.
• Platform capabilities become the constraint and the prize: whoever controls how apps can use location (foreground vs. background updates) effectively sets the pace of innovation for every player in the category.

Third-order effects

• The pattern points toward mobile platforms becoming the de facto governors of location data — Apple's later move into hardware-level proximity with iBeacons shows the OS vendor absorbing capabilities that once belonged entirely to app makers.
• If adoption holds, always-on location raises a structural tension between utility and privacy that the industry still hasn't resolved — what later coverage framed as location's social paradox between sharing where you are and protecting who can know it.