Phoning home is usually surreptitious communication between applications or hardware installed at end-user sites and their manufacturers or developers. This could be for purposes of access control, such as transmitting an authorization key. It could also be for marketing purposes, such as the "Sony BMG Rootkit", which transmits a hash of the currently playing CD back to Sony, or a digital video recorder (DVR) reporting on viewing habits. Also, based on some sources mainframes have had 'phone home' capabilities for many years, to alert the manufacturer of hardware problems with the mainframes or disk storage subsystems. This enables repair or maintenance to be performed quickly and even pro-actively.
The traffic could be encrypted, so that the end-user does not know what data is being transmitted.
In one sense, every time a user visits a Web page or any other kind of remote server it is "phoning home", since the IP address of the user's own computer is sent to the Web server (an unavoidable process if a reply is required). The use of graphics on a Web page establishes further connections, possibly to different sites, which can also be used for tracking, as in the case of "Web beacons". Some other file types can do the same kind of (essentially anonymous) tracking by setting up a connection which is intended to be logged, e.g. PDF though in 7.0.5 update of Adobe Reader the user is notified.[1]
The usage of the term "phone home" for this behaviour is a reference to the 1982 film E.T. the Extra-Terrestrial.