This is false, they do not send a recorded record of your movements to apple, however they do send GPS+WLAN BBSID correlation data back to apple,[1] they claim the processed is anonymized, but there are very powerful deanonymization techniques that can be applied to large data sets. [2][3][4]
I live in almost the middle of nowhere, i guarantee nothing like google maps, etc has ever passed this way to map my WIFI point's BSSID onto a physical location, yet the week a member of my family got an iphone, plugging the BSSID into a location api gives the exact location of my house...
Here's more useless analytical evidence to suggest that most people don't know everything: when Samy Kamkar[0] first demonstrated geolocation via BSSIDs, I tried out every wireless router in my house, including one that had not been plugged into a wall in over 4 years and never at my current residence, long before Google started wardriving for street maps and well before the first iPhone came out. He was able to accurately map it to my old residence. That means that sometime before December of 2006, someone or something was able to snatch my BSSID from someplace, accurately note it's physical location in the world, and store that away in some database that was used almost 4 years later. I can guarantee you it was not Apple, and I'd be damned surprised if it was Google at that time.
The data was stored on the phone, not sent to Apple, and certainly not to advertisers.
The data was used for GPS assistance -- it was a cache that triangulated your location from cell phone towers to help get a faster GPS lock (and to find your location without GPS if you’re getting bad GPS signal).
If you're concerned about the police finding out your moves, they have access to such information from the tellcos themselves with your cell number, whereas to use those stored GPS logs they would need physical access to your iPhone.
