What does the "arrow" icon shown in the iPhone status bar indicate?
This icon represents Location Services. The icon isn't generally shown all the time. The appearance of this icon indicates that some iOS app/service has recently accessed your current location.

The appearance of the icon can be configured by going to Settings app → Privacy → Location Services → System Services on your iPhone and toggling the switch shown in front of Status Bar Icon item.



Your iPhone may use not just GPS, but a combination of various technologies such as Bluetooth, crowd-sourced Wi-Fi hotspots, location determined by cellular towards, and other GPS like technologies such, GLONASS, Galileo, and QZSS to determine the current location.

Also, as shown above the Status Bar Icon item, the icon itself could be styled in different form to convey different information.