Location Sharing is one of latest technologies recently released into the mainstream by Google in the form of Latitude, last year Google tried to put the application on the iPhone but Apple rejected the app, maybe this patent shows the reasoning behind that.
Apple’s method of location sharing involves sending SMS messages between phones. The message would be encoded in such a way that the phone can then extract your current location. Locating sharing is only part of the package — another patent titled ‘position fix indicator’ focuses on ways of displaying the user’s location, and the location of people that you’re connected with.
The diagram also seems to suggest a forward-facing camera, something that was speculated for the iPhone 3GS but turned out false, perhaps meaning the iPhone 4G will have this feature. It’s possible the diagram is just a placeholder (it looks identical to the one used in other patents), but it could be indicative of a forward-facing camera in the iPhone 4G arriving later this year.