Thanks to sleuthing by some software developers, we learn that many smartphone apps send our entire address books (names, addresses, phone numbers, emails, etc.) to their servers *without* explicitly asking for our permission. See here for a nice summary (link).
This action makes us complicit in violating the privacy of our friends and family members.
I think the prevalence of this type of behavior, plus the stealthiness associated with it, speaks of a certain desperation, an acknowledgement that relying on users to build their own networks via invites and word of mouth is not working as well as hoped.
The technical excuse that they do not "store" this data is a distraction. They do not store this data because until now, this data is openly available, there for all to take, each and every day. The irony is that once a gate is erected to control access to this information, the developers will feel a greater need to store this data because the next time they ask for permission, they fear the user might refuse.
I disagree with the technical solution offered by the article's author. Anonymizing the data is of course a great solution but the anonymized data is useless for marketers. Marketers want to have our names and addresses because with those data, they can learn all kinds of things about us via data vendors. I don't know if these apps are using the contact information in this way but it's quite likely some are doing so.
Apple's solution is preferable - that each time an app wants to access our address book, it should ask for explicit permission.
Underlying many of these abuses is the culture of "free" stuff. Because this generation of companies has never directly earned revenues from consumers, they do not have the respect of consumers that traditional corporations do. Many traditional companies have learned that consumers like to be dealt with openly and honestly.