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This seems pretty clear. They’re giving you a heads up that in a future iOS version you won’t be able to get awake/pickup information whilst using the background location api.

As others have pointed out, this makes no sense. Apple allows tons of apps in categories that compete with theirs. How many calendar or email or stock tracker apps are there? They make no money from Screen Time, whereas they do make money from apps sold in the App Store.

If they do kill this category of app, I’d say there’s a 99% chance it’s either for technical (for example battery drain) or more likely, privacy reasons.

Do you explicitly get the user to consent to the use if background location data for this purpose?