How can I opt out of Apple iPhone location tracking?

Apple has not offered iPhone owners an option to opt out of location data collection at this time. Third party apps can be prevented from using Location Services by navigating to Settings -> General -> Location Services -> OFF. Apple collects location information from your iPhone even if Location Services is switched off in Settings.

Apple states in its privacy policy (updated June 21, 2010) the following:

To provide location-based services on Apple products, Apple and our partners and licensees may collect, use, and share precise location data, including the real-time geographic location of your Apple computer or device. This location data is collected anonymously in a form that does not personally identify you and is used by Apple and our partners and licensees to provide and improve location-based products and services. For example, we may share geographic location with application providers when you opt in to their location services.