Process behind accurately locate gps
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An airtag doesn’t know its exact location. However it is in contact with other apple phones which do have their own location available. So if it’s within range of a phone, you can report the location as being that of the phone, draw a circle around it showing the communication radius, and call it good.
Thus the airtag can give you an idea of where it’s located, based on the idea that the phone that last saw it knows said phone’s location and that’s close enough.
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