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That's exactly how it works on Android. It uses Google+ profile pictures, which you can override, you can also enable option to show details about numbers that are not in your contacts (including the picture).

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The thing is I have absolutely no interest in join a bloody social network just to use my phone book, as a matter of fact I block every app on my phone from accessing the contacts info.

I suspect that I'm not alone in this regard.

I would rather avoid a social network getting their hands on my contacts, though. You could sync facebook and twitter with your contacts in iOS, but I just don't feel comfortable doing it.

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