By being able to activate either a webcam or microphone on a PC, laptop or smartphone, intruders can listen in on sensitive meetings and conversations and even know where the meetings are held, who attended, and everything about what was discussed. It is of course illegal to record a conversation without obtaining permission of the person or persons being recorded, but keep in mind even web conferencing software allows for proceedings to be recorded and no permission is asked.
There are plenty of vendors selling spy software, some designed for "professional" business use and marketed as a way to track employees, such as a product for employee monitoring made by Inter Guard. These days, there are hundreds of spying products to choose from, and the best of them facilitate surreptitious webcam and mobile cam spying.
Along with the photos, data on your location is displayed in the intercept so you can be easily tracked.
All this happens without any awareness by the phone user -- the screen can either be turned off or on, it does not matter.
Part of the problem stems from the fact that it is legal to sell spy software.