Apple recently acquired WifiSlam. How does their technology work?
Their website doesn't go into much detail.
Allow your smartphone to pinpoint its location (and the location of
your friends) in real-time to 2.5m accuracy using only ambient WiFi
signals that are already present in buildings.We are building the next generation of location-based mobile apps
that, for the first time, engage with users at the scale that personal
interaction actually takes place. Applications range from step-by-step
indoor navigation, to product-level retail customer engagement, to
proximity-based social networking.
Best Answer
After googling a bit more, I found this paper, Using Wi-Fi for Navigating the Great Indoors. I suppose the algorithm that handles multiple fingerprints, plus compass and accelerometer is what caught Apple's eye.
Edit 2: Also, looks like WifiSlam had a blog that's been removed. However, Google still has it in their cache with some details:
Edit 3 Grizzly analytics provides map setup details in their recent blog post.
Edit 4 Here's a video from the GeoMeetup (kindly posted by Ragi Burhum) where Joseph Huang of WiFiSLAM presents a talk about the underlying algorithms.