Here’s an excellent example of what NOT to do: Two unrelated apps recently issued apologies after resaerchers discovered the apps were secretly taking users’ contacts from their address books and storing them on company-owned servers. The app developers promised it wasn’t a malichous move, but issues apologies and deleted all the data.
Developers must ALWAYS consider their users’ privacy and be completely transparent in all they do…be it analytics or address-book copying.
The complete story is available from the BBC News – iPhone apps Path and Hipster offer address-book apology.