A Small Pile of Sensors
The trick is not one clever sensor but a handful of them working together. Modern phones contain a small set of motion- and direction-sensing chips packed into the body. Each one measures a different aspect of how the phone is moving or pointing. The phones software constantly reads them all and combines what they say into one picture of how you are holding the device.
The Accelerometer: Tilt and Movement
The most familiar sensor is the accelerometer. It measures the force of acceleration acting on the phone, including the constant pull of gravity. By sensing which direction gravity is pulling, the accelerometer can tell whether the phone is being held upright, sideways, or face-down. This is exactly what makes the screen rotate when you turn the phone, and what helps step-counting apps notice when you are walking.
The Gyroscope: Rotation
A second sensor, the gyroscope, focuses on rotation rather than gravity. It measures how fast the phone is spinning around each of its axes. The gyroscope is what makes phones feel so responsive in racing games where you steer by twisting the device, and it also helps the camera keep video steady by detecting tiny shakes of your hand in real time.
The Magnetometer: A Built-In Compass
A third sensor, the magnetometer, acts like a tiny digital compass. It senses the Earths magnetic field, which lets the phone work out which way is north. This is the sensor that lets a maps app spin the little arrow as you turn, so the streets on the screen line up with the streets around you.
Working as a Team
These sensors are remarkable on their own, but their real power comes from working together. The phone constantly blends their readings into one consistent picture of orientation and movement. That is why a phone can do things like keep a virtual horizon level in a flight simulator, or recognise the difference between you lifting the phone to look at it and simply jostling it in a pocket. The "feel" of a modern phone — its awareness of how you hold it — is the quiet cooperation of these three small chips.
Source
This article was written using information from Wikipedia.