In some ways, smart phones are what personal computers should have been. They are computers with sensors that can tell where you are and to some extent what you are doing. They are devices that you keep with you all the time and that can observe and learn things about you from your actions. All this information makes them very intimate partners that in some cases can know more about you than any human does. Using this information they can adapt to work with you seamlessly. They can adjust to your behavior. That same information that lets them personalize their behavior to you and can give others a very creepy level of information about your life.
The TED talk above gives you a a little insight into what this can mean. I think it will take years for this tension between the pros and cons of this technology to be worked out by society. Right now its a bit of the wild wild west.