My phone was stolen last night. I made sure it was in Lost Mode in iCloud and it was immediately in Offline status when I open iCloud. I am positive the thief switched it off. Now I am 100% certain the Find my iPhone option was turned on on my iPhone, but will the "Lost Mode" be of any help if it was not turned on on the iPhone? Would it be showing "Offline" if I did not turn on the option?
Lost mode combined with iOS 7 is extremely useful as long as th phone has cellular service or is connected to WiFi networks that it trusts. The device needs to connect to the Internet to be re activated after wiped, at which point it will enter lost mode and refuse to work again without your password for Apple ID.
Be sure to not remove that device from your account since that makes the device far more risky and expensive to sell, pawn or try to use by the thief or even someone that ends up with the device. Someone could desolder the CPU and try to reserialize or cannibalize the parts, but the quick hit of cash for a stolen device is defeated by Activation Lock and Lost Mode features.
The device shows as offline when it hasn't checked in recently to the Apple servers despite an attempt by the Apple Push Notification service attempting to send a check in request to the last active address of the device on the Internet.
If the device ever gets connected to Wifi or cellular data reconnects it, your Lock request will get sent, acknowledged and you'll get an email. If you are quick, you can log in to find my friends and see if the location data updates as well at that point.
If your device is offline, the passcode lock and tracking (if applicable) take effect the next time it’s online.
So the Lost Mode should be activated.
I am not sure why it would show "offline" though. Apple support says you should
see the device’s current location, as well as any changes in its location on the map.
It seems the whole thing is of any use only when the device is online. I say this from personal experience.
Keep you eyes glued to your email, and when you see the notification, immediately use the Find my iPhone app or https://www.icloud.com/#find to grab the location. If you aren't quick enough, and the device is already off or offline again by the time you get there, you'll get no location.
My stolen iPad went online briefly today, and I see I got an email, but it is offline again. I'm shocked that I have no access to the location data. In my opinion this is a glaring, unforgivable omission in the service. The thief can simply make sure it is offline or turned off and I have nothing in my hands. It should just send the location data to Apple's servers so that at least I have a last know location in my hands. But Apple thinks different.
At least the thief might be a bit afraid at the moment, as he may think I do have the location. I hope he doesn't sleep well.