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If the GPS is enabled (in the notification view at the top, the GPS icon is enabled), but the app doesn't use it, does it drain battery? I understand that GPS drains battery because it requires a different component to be charged up. Or does the fact that the GPS is enabled only mean that the App can use it?

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The GPS icon in the status bar means that an application is currently using the GPS so it is draining the battery. GPS does not however drain any battery just because you have it enabled in the settings menu.

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Could you please clarify what you mean exactly when you say "The GPS icon in the status bar"? In this partial screenshot, do you mean the icon circled in red or the icon circled in blue? – Joe Jul 17 '12 at 6:44
The one circled in red, the other one doesn't exist in stock Android (and neither in my manufacturer's skin) – Erik Jul 17 '12 at 10:41

Technically, the GPS icon is shown whenever the GPS chip is being used. If it isn't being used, it won't be shown.

Poorly designed apps may however keep trying to use the GPS feature just because it is enabled and thereby drain your battery. Example - keeping one's phone inside one's pocket or basically without having sight of GPS satellites will cause the GPS chip to keep searching thereby draining the battery.

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I'd like to add that the cellphone component will also drain a lot of battery when it enabled where there is no network. – Erik Apr 21 '12 at 8:48

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